2007 (2) TMI 525 - AT - Central Excise

Tribunal denies Modvat credit due to time limit breach, stresses adherence to rules.

BHARAT HEAVY ELECTRICALS LTD. Versus CC & CE (APPEALS), HYDERABAD

The Tribunal upheld the disallowance of Modvat credit amounting to Rs. 67,21,257/- as it was availed beyond the prescribed six-month limit from the date ... Cenvat/Modvat - Limitation for taking credit Issues:Disallowance of Modvat credit due to availing beyond the prescribed time limit.Analysis:The appeal was filed against an Order-in-Appeal disallowing Modvat credit amounting to Rs. 67,21,257/- for being availed beyond the six-month period from the date of duty paying documents. The appellant argued that the time limit of six months introduced in 1995 should not apply to transactions predating this amendment. Additionally, they claimed that for goods received through job workers, a nine-month time limit applied as per a specific notification. The appellant contended that the amendment eliminating the time limit from 2000 should have a retrospective effect on pending cases, citing relevant Supreme Court precedents.The Respondent, however, maintained that the pre-2000 stipulation of a six-month time limit for availing Modvat credit should not be retrospectively affected by the subsequent amendment. The Respondent supported the legality of the impugned order disallowing the credit.The Tribunal reviewed the case records and noted that the impugned order relied on a previous Larger Bench decision which held that credit could not be taken after six months following the 1995 amendment to Rule 57G of the Central Excise Rules. This decision had been cited in various subsequent judgments, indicating its relevance and consistency in the legal interpretation. The Tribunal highlighted that the Larger Bench decision had not been overturned by higher authorities.The Tribunal rejected the appellant's arguments, emphasizing that the amendment removing the time limit in 2000 should not retroactively apply to the entire period. They reasoned that legal provisions evolve over time, and it would be illogical to apply provisions from different periods interchangeably. Ultimately, the Tribunal found no merit in the appellant's contentions and upheld the legality of the impugned order, leading to the dismissal of the appeal.In conclusion, the Tribunal's decision reaffirmed the importance of adhering to the prescribed time limits for availing Modvat credit, based on the specific rules and amendments in force during the relevant periods.