2012 (9) TMI 820 - AT - Central Excise

Appellate Tribunal allows appeal on Cenvat credit denial without time limit under Central Excise Act

The Appellate Tribunal CESTAT Chennai allowed the appeal filed by the appellants regarding the denial of Cenvat credit for the period from October 2004 to ... Cenvat credit - time limit for taking credit - Cenvat Credit Rules - Central Excise Act - imposition of interest and penalty for delayed creditCenvat credit - time limit for taking credit - Cenvat Credit Rules - Central Excise Act - imposition of interest and penalty for delayed credit - Whether Cenvat credit could be denied and interest and penalty imposed on the ground that the credit was not taken within one year. - HELD THAT: - The Tribunal held that neither the Central Excise Act nor the Cenvat Credit Rules prescribe any period within which Cenvat credit must be taken. While the Rules refer to the availability of credit immediately, they do not establish a statutory time limit of one year. The lower authorities' conclusion that credit must be taken within one year was therefore incorrect. In consequence, the denial of Cenvat credit and the imposition of interest and penalty on that basis could not be sustained. The appeal was decided on this legal premise and the impugned order set aside.Impugned demand denying Cenvat credit and imposing interest and penalty on the ground of delay beyond one year set aside; appeal allowed and consequential relief granted.Final Conclusion: The Tribunal allowed the appeal, holding that no statutory time limit of one year exists for taking Cenvat credit under the Central Excise Act and the Cenvat Credit Rules; the orders denying credit and imposing interest and penalty on that basis were set aside and consequential relief granted. The Appellate Tribunal CESTAT Chennai allowed the appeal filed by the appellants regarding the denial of Cenvat credit for the period from October 2004 to March 2009. The Tribunal held that there is no prescribed time limit for taking the credit under the Central Excise Act or Cenvat Credit Rules. The order imposing penalty and interest was set aside, and the appeal was allowed with consequential relief.