CENVAT CREDIT ON CERTIFIED COPY OF BILL OF MISC. CHARGES ON FINALIZATION OF BOE

[PRANAB PANDA]

Dear Sir

We the manufacturer of Stainless Steel products are engaged in import of various inputs, raw materials and capital goods from abroad for manufacture of aforesaid products.We had availed Cenvat credit on additional duty (CVD and SAD) leviable under Section 3 of the Customs Tariff Act, 1975 on provisional Bill of Entries. On finalization of BOE, we had paid differential duty amount. We are in receipt of some certified/endorsed copies of Bill for Misc. Charges on account of “differential duty amount” paid for final assessment of Bill of Entries.

Our specific query is about the legal position for availing CENVAT Credit on certified copies of Bill for Misc. Charges by Administrative Officer of Customs House.

• For example, we availed the Cenvat Credit against Provisional BOE No 38000614 dated 16.12.2014 under proviso 3 to the Rule 4(1) of Cenvat Credit rules, 2004.
• Payment of differential duty on finalization of BOE is 16.12.2014 and original copy is lost.
• We are in receipt of “Bill for Misc. Charges” certified by AO Custom House on 26.07.2016

Can we avail the Cenvat credit on the basis of aforesaid documents as the one year already been passed from the date of issue of Bill of Misc. Charges (16.12.2014) and if yes, then guide us the for availing the Cenvat credit on the basis of aforesaid document.

 

[KASTURI SETHI]

Sh.Panda Ji,

Taking credit in such situation is not litigation-free. There are conflicting judgements on the issue. In my view if you are opt for fighting the case legally, ultimately you will win the case. My view is based on the case laws.There was similar amendment in the Central Excise Rules, 1944 (Cenvat Credit Rules) in the year 1995. It is my observation that if you take credit (but do not utilise for the time being) and intimate the department you will save yourself from interest and penalty, as penalty is imposed only if mala fide intention is established. Giving intimation to the department will prove your bona fides. However, the following judgement of the Supreme Court can help you a lot. It has been relied upon by so many courts/CESTATs in a large number of cases.

2002 (142) E.L.T. 5 (S.C.) OSRAM SURYA (P) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, INDORE

2001 (138) E.L.T. 934 (Tri. - Chennai) = 2000 (5) TMI 900 - CEGAT, CHENNAICOMMISSIONER OF C. EX., CHENNAI-I Versus MANALI PETROCHEMICALS LTD.

2001 (133) E.L.T. 535 (Mad.) = 2001 (8) TMI 128 - HIGH COURT OF JUDICATURE AT MADRASCOMMISSIONER OF C. EX., CHENNAI-I Versus CEGAT, CHENNAI

[Ganeshan Kalyani]

Sir, in my view the credit would be eligible. The time limit fixed is to bring discipline to the assessee. It is procedural which will not sustain in Higher Forum. If the amount is substantial then should you should fight. Thanks.

[KASTURI SETHI]

Dear Sir,

Real intent of Govt. behind fixation of time limit for one year is to plug the misuse of double or triple credit on the same invoice. During the posting in Audit when I was in service, I have detected such cases of misuse. What is logic if any, assessee takes credit after two years of the issue of invoice on some pretext or other ? Practically it is not possible to scrutiny all the invoices in in a large unit.

Fixation of time limit for taking credit is very much right in the the interest of revenue.

[Ganeshan Kalyani]

Sir, I am in agreement with your views. Thanks.

[CSSANJAY MALHOTRA]

Am in agreement with Sh. Kasturi ji.. CENVAT Credit could have been availed within period of 1 year and non-compliance without any valid reason would not make party eligible to avail CENVAT, even by the higher authorities.

AI Summary

Cenvat credit time limit challenged; certified customs bill may support credit if notified and unused pending litigation.
The core operative position is that eligibility to avail Cenvat credit on a certified customs "Bill for Misc. Charges" received after final assessment and after the one year period is contested: some practitioners endorse litigation to secure credit, while others uphold the one year rule to prevent misuse. A recommended procedural measure is to take the credit entry but refrain from utilization and immediately intimate the department to evidence bona fides and reduce exposure to interest or penalty while pursuing legal remedy.