Time period for availing CENVAT Credit

[Guest]

I wanted to know what is the maximum time period after receipt of raw material / invoice date  to the premises of manufacturer for availling a CENVAT credit.

Is their any notification available in central, excise rule

[JAMES PG]

There is no time limit prescribed either under CE Rule or CCR for availment of Cenvat Credit.

 In the Circular No F. No. 345/2/2000-TRU dated 29th Aug,2000 , clarification has been issued in this regard.
"Some apprehensions have been expressed that if the CENVAT credit is not taken "immediately", like within 24 hours or so, the field officers may deny the CENVAT credit. The idea is that if the manufacturer desires he can take the CENVAT credit at the earliest opportunity when the inputs are received in the factory. This, however, does not mean, nor is it even intended that if the manufacturer does not take credit as soon as the inputs are received in the factory, he would be denied the benefit of CENVAT credit. Such an interpretation is not tenable."

[YAGAY and SUN]

Rule 4(1) of Cenvat Credit Rule state that CENVAT may be taken immediately on receipt of inputs in the factory or the premises of service provider.  Department has clarified that 'immediately' means as the earliest opportunity when the inputs are received.  Howerver, this does not mean that if manufacturer/service provider does not take credit as soon as inputs are received in the factory/premises of srvice provider, he would be denied benefit of CENVAT credit.  Such an interpretation is not tenable --- Immeidately doesnot mean within 24 hours.  It is not necessary to take credit as soon as inputs are received in the factory.  However, manufacturer/service provider shlud take credit at earliest opportunity.- CBE&C circular No. 345/2/2000-TRU dated 29-08-2000 - reiterated in Chapter 5 para 3.6 of the CBE&C's manual.

In fact, the rule uses word 'may be taken immediately.  The 'may' cannot be read as 'must'.

In manty cases like Hindustan Motors v CCE (1994 (5) TMI 93 - CEGAT, CALCUTTA) = 1994 (73) ELT 597 (CEGAT) and CCE V Premier Cables  (1991 (5) TMI 151 - CEGAT, MADRAS) = 1991(56) ELT 853 (CEGAT), it was held that credit should be take in a reasonable time.  In one case, it was held that in absence of any time limit, CENVAT credit can be taken any time - even after 3 or 4 years. - Sail v CCE 2004 (41) RLT 706 (CEGAT) - followed in Steel Authority of India Ltd. v CCE 2001 (2001 (1) TMI 144 - CEGAT, NEW DELHI)= (129) ELT 459 (CEGAT),  Super Cassettes v CCE  (2004 (6) TMI 374 - CESTAT, NEW DELHI) = (2004) 171 ELT 280 (CEGAT).

In Johnson Matthey Chem India v CCE (2009 (4) TMI 149 - CESTAT, MUMBAI) = (2009) 240 ELT 673 (CESTAT), it has been held that when statute does not prescribed any time limt for any action, no time limit can be imputed into that statute from any other provision.  Hence, there is no time limit for taking CENVAT credit - same view in Industrial Cables v CCE (2009 (1) TMI 281 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH)= (2009) 236 ELT 658 (P&H - DB).

AI Summary

Cenvat credit timing: 'immediately' means the earliest opportunity and no statutory time limit to claim credit. No statutory time limit applies to availment of CENVAT credit; Rule 4(1) states credit 'may be taken immediately' on receipt of inputs, but administrative guidance clarifies 'immediately' means the earliest practicable opportunity and does not impose a rigid deadline. Courts and tribunals have held that, in absence of an express time bar, credit may be claimed within a reasonable period and delays alone do not automatically defeat the claim.