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CENVAT CREDIT
Yagnesh Desai & Co.
Provided also that CENVAT credit in respect of an invoice, bill or, as the case may be,
challan referred to in rule 9, issued before the 1st day of April, 2011 shall be allowed, on
or after the day on which payment is made of the value of input service and the service
tax paid or payable as indicated in invoice, bill or, as the case may be, challan referred
to in rule 9:
Provided also that the manufacturer or the provider of output service shall not take
CENVAT credit after six months of the date of issue of any of the documents specified in
sub-rule (1) of rule 9.
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CENVAT CREDIT
Yagnesh Desai & Co.
ANALYSIS
3.1 In our case, facts are slightly different as manufacturer has not
claimed the credit on accrual basis and then reversed it on expiry of
statutory period. Hence, it is specifically not covered under the above
clarification of CBEC.
3.2 Hon. Supreme Court in case of Osram Surya Pvt. Ltd. v.
Commissioner 2002 (142) E.L.T. 5 (S.C.) while dealing with similar
amendment for claiming CENVAT credit of inputs within period of six
months from the date of invoice, has held that this procedural
amendments in the rule will apply to all the pending claims made for the
first time. The said judgment will not apply in this case as per below
reasoning.
3.3 Hon. Chennai Tribunal in decision of COMMISSIONER OF CENTRAL
EXCISE, CHENNAI-III Versus FORD INDIA LTD. 2012 (284) E.L.T. 202
(Tri. - Chennai) has distinguished the above referred decision of Hon.
Supreme Court. In this case, credit was claimed by the assessee after the
expiry of six months from the date of invoice. Hon. CESTAT held that said
amendment shall not apply to the case as credit was not initially claimed
due to a procedural objection only. It held that amendment prescribing
the limitation period of six months has been introduced with the sole
objective of negating belated claims which cannot be cross checked due
to time factor. Relevant para of the decision is reproduced:
Para 11. It may happen in a number of cases that the inputs might be
received by the assessee but on account of loss of documents or
otherwise of some procedural objections, he is not able to take the credit.
For removal of such objections raised by the Revenue, it may take a
period longer than six months. The credit will not become deniable to the
assessee on the said count, though the period of six months might have
been passed by that time. At this stage, we also take note of the proviso
to sub-rule (10) of Rule 57G, which empowers the Assistant
Commissioner to condone the delay in filing the declaration. However,
clause (i) of sub-rule 10 is to the effect that Assistant Commissioner will
not condone the delay if the inputs are received in the factory prior to the
period of six months. This means that he can condone the delay in filing
the declaration in respect of the inputs received upto a period of six
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CENVAT CREDIT
Yagnesh Desai & Co.
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CENVAT CREDIT
Yagnesh Desai & Co.
right cannot be denied merely because the procedure was issued later. In
this case, law was amended to provide for refund of unutilized deemed
credit on grey fabrics from 01.07.2001. However procedure to claim the
refund was prescribed on 01.03.2002. In our case, at the time of
receiving the invoices one could not visualize the insertion of sixth proviso
stated above. Thus, the amendment so made is in fact substantive in
nature and not procedural and hence, it can only take effect
prospectively.
CONCLUSION
4. In view of above analysis, we are of the opinion that CENVAT credit is
available on the referred transactions provided the same is otherwise
eligible under the Rules and thus the amendment shall be applied
prospectively.
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