CENVAT credit remains available where substantive conditions are met and no pre-amendment prohibition restricts duty-paid inputs.

CENVAT credit on duty-paid inputs procured from units availing exemption was available before the Rule 12 amendment took effect, where the inputs suffered duty, were used for final products or output services, and were received under prescribed documents. In the absence of an express pre-amendment prohibition, a later express provision could not restrict credit for the earlier period. Extended limitation could not apply because returns were filed, audits and refund claims had been processed, and no suppression of facts with intent to evade duty was established. The disputed credit remained available and recovery was time-barred.

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Issues: (i) Whether CENVAT credit on duty-paid inputs procured from units availing exemption under Notification No. 01/2010-CE was admissible before the amendment to Rule 12 effective from 20.01.2014; (ii) Whether the extended period of limitation could be invoked for recovery of the credit.

Issue (i): Whether CENVAT credit on duty-paid inputs procured from units availing exemption under Notification No. 01/2010-CE was admissible before the amendment to Rule 12 effective from 20.01.2014.

Analysis: The CENVAT credit scheme requires harmonious reading of its provisions. Credit is available where the input has suffered duty, is used in manufacture of final products or provision of output services, and is received under prescribed documents. As these conditions were undisputedly fulfilled, and the Rules contained no express pre-amendment prohibition against such credit, the later express provision could not be read as restricting credit for the earlier period.

Conclusion: CENVAT credit was admissible before 20.01.2014; this issue was decided in favour of the assessee.

Issue (ii): Whether the extended period of limitation could be invoked for recovery of the credit.

Analysis: The records had been subjected to audits, returns were regularly filed, and refund claims had been processed. Revenue produced no evidence of suppression of facts with intent to evade duty. The dispute also involved interpretation of the CENVAT Credit Rules, in which circumstances the extended period was not invocable.

Conclusion: The extended period of limitation was not invocable; this issue was decided in favour of the assessee.

Final Conclusion: The disputed input credit remains available and the demand is time-barred.

Ratio Decidendi: Where the substantive conditions for CENVAT credit are fulfilled and no express prohibition exists, a subsequent amendment expressly allowing such credit does not itself justify denial for the preceding period; extended limitation requires proof of suppression with intent to evade duty.

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