2025 (1) TMI 6 - AT - Central Excise

Revenue cannot deny Cenvat credit on pre-amendment invoices using retrospective six-month time limit

Welspun Syntex Limited Versus Commissioner of C.E & S.T. -Silvasa

CESTAT Ahmedabad allowed the appeal where revenue denied Cenvat credit on invoices dated prior to 11.07.2014 amendment. The tribunal held that the ... Denial of Cenvat credit availed on the strength of invoices which are dated prior to amendment of Rule 4 vide Notification No. 21/2014-CE (NT) dated 11.07.2014 - As per amended rule, whether time limit of six months from the date of issue of the invoice for taking the credit, can be applied retrospectively to invoices issued before the amendment date - HELD THAT:- As per the facts of the present case though the appellant have availed the Cenvat credit belatedly in the month of August/September-2014, however, all the invoices related to such credit were issued before 11.07.2014. Therefore, in respect of those invoices, the amended Rule 4 vide Notification No. 21/2014-CE (NT) dated 11.07.2014 is not applicable and the credit could not have been denied on the ground of time bar. In the case of Voss Exotech Automotive Pvt. Ltd. [2018 (3) TMI 1048 - CESTAT MUMBAI] the Mumbai Tribunal has held that 'the Notification No. 21/2014-S.T. (N.T.), dated 11-7-2014 should be applicable to those cases wherein the invoices were issued on or after 11-7-2014 for the reason that notification was not applicable to the invoices issued prior to the date of notification therefore at the time of issuance of the invoices no time limit was prescribed. Therefore in respect of those invoices the limitation of six months cannot be made applicable. Moreover for taking credit there is no statutory records prescribed the assessee’s records were considered as account for Cenvat credit. Even though the credit was not entered in so-called RG-23A, Part-II, but it is recorded in the books of accounts, it will be considered as Cenvat credit was recorded. On this ground also it can be said that there is no delay in taking the credit. As per my above discussion, the appellant is entitled for the Cenvat credit hence the impugned order is set aside.' Conclusion - The time limit prescribed under Notification No. 21/2014-CE (NT) dated 11.07.2014 has no application in respect of the invoices issued prior to date of the said amendment in Rule 4 of Cenvat Credit Rules, 2004. The impugned order is not sustainable - Appeal allowed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal question in this judgment is whether the denial of Cenvat credit availed on the strength of invoices dated prior to the amendment of Rule 4 via Notification No. 21/2014-CE (NT) dated 11.07.2014 is correct. Specifically, the issue revolves around the applicability of the amended rule to invoices issued before the amendment date.2. ISSUE-WISE DETAILED ANALYSIS- Relevant legal framework and precedents: The legal framework involves Rule 4 of the Cenvat Credit Rules, 2004, which was amended by Notification No. 21/2014-CE (NT) dated 11.07.2014. The amendment introduced a time limit of six months for availing Cenvat credit from the date of issue of the invoice. Several precedents were cited, including judgments from various tribunals and high courts, which consistently held that such amendments cannot be applied retrospectively.- Court's interpretation and reasoning: The court interpreted that the amendment to Rule 4 is prospective and does not apply to invoices issued before the amendment date. The reasoning is based on the principle that a statutory provision cannot be applied retrospectively unless explicitly stated. The court relied heavily on prior judgments which affirmed this interpretation, emphasizing that the right to Cenvat credit accrues at the time of payment of tax on inputs and is not affected by subsequent amendments.- Key evidence and findings: The court found that all invoices related to the Cenvat credit in question were issued before 11.07.2014. Therefore, the amended rule prescribing a six-month time limit was not applicable to these invoices. The court noted that the appellant had availed the credit belatedly, but this delay did not contravene the rules applicable at the time the invoices were issued.- Application of law to facts: The court applied the law by determining that the appellant's actions were in compliance with the rules as they stood prior to the amendment. Since the invoices were issued before the amendment date, the six-month time limit did not apply, and the credit could not be denied on this basis.- Treatment of competing arguments: The court considered the arguments of the Revenue, which reiterated the findings of the impugned order, asserting that the credit was availed beyond the prescribed time limit. However, the court dismissed these arguments by referencing multiple judgments that supported the non-retrospective application of the amended rule.- Conclusions: The court concluded that the denial of Cenvat credit based on the amended rule was incorrect. The appellant was entitled to the credit as the invoices were issued before the amendment, and the retrospective application of the rule was not justified.3. SIGNIFICANT HOLDINGS- Preserve verbatim quotes of crucial legal reasoning: The court quoted from several judgments, emphasizing that 'the amendment effective from 11.07.2014 cannot have retrospective effect.' It further stated, 'The right to the Cenvat credit accrued on the very day when the inputs were received.'- Core principles established: The judgment reinforced the principle that amendments to statutory provisions are generally prospective unless explicitly stated otherwise. It also affirmed that the right to Cenvat credit is established at the time of tax payment on inputs and remains unaffected by subsequent procedural amendments.- Final determinations on each issue: The court determined that the appellant was entitled to the Cenvat credit for invoices issued before the amendment date, and the denial based on the amended rule was incorrect. The appeal was allowed, and the impugned order was set aside, granting consequential relief to the appellant.