CENVAT CREDIT, Central Excise

[BHARAT COKING COAL LIMITED]

THE ASSESSEE COMPANY IS ENGAGED IN EXTRACTION OF COAL ON WHICH EXCISE DUTY WAS IMPLEMENTED FROM MAR'11 FOR THE FIRST TIME. HOWEVER THE REGISTRATION AS INPUT SERVICE DISTRIBUTOR WAS TAKEN IN NOV'13. SOMEHOW THE COMPANY DID NOT PASS A HUGE AMOUNT OF CENVAT CREDIT ON INPUT SERVICES (MAINLY ON CISF SERVICES) FOR THE PERIOD UPTO NOV'13. IN THE MEAN TIME A NOTIFICATION CAME IN SEP'14 RESTRICTING THE PERIOD OF CENVAT CREDIT ON INPUT SERVICES UTO 6 MONTHS & SUBSEQUENTLY WAS RAISED TO 1 YEAR.

NOW CAN WE TAKE THE CREDIT TODAY FOR THE PERIOD MAR'11 TO OCT'13 ON THE PLEA THAT THE TIME PERIOD IS ONLY APPLICABLE ON INVOICES ISSUED AFTER 6 MONTHS/1 YEAR. A HUGE STAKE OF THE COMPANY IS INVOLVED IN THIS. KINDLY GIVE YOUR VALUD SUGGESTION.

REGARDS

CA C.S. CHAWLA

Posts / Replies

[KASTURI SETHI]

Sh.Chawla Ji,

I am of the view that you must fight the issue. You may get relief after litigation. If you do not fight, the chapter is closed now and that too for ever. It cannot be denied that CE duty has been paid and taxable output service has been provided. These two factors are very much basis of the facility of Cenvat Credit Scheme.Throw the ball in the court of law. You may apply for permission to use the credit for the past period. The department will reject the request and on the basis of rejection letter you can file appeal with the Commissioner (Appeals) and thereafter litigation may go up to High Court/Supreme Court but it will open the doors for other suffers also. It is not necessary that for filing appeal SCN and Adjudication Orders are required. Appeal can be filed on the basis of the letter of the Department also.

[Rajagopalan Ranganathan]

Sir,

During the period 1.9.2014 to1.3.2015 the duty paying documents will be valid for 6 months from the date of issue of the duty paying/payable document. From 1.3.2015 this period of 6 months was increased to 12 months/1 year. Therefore if you want to take credit of duty paid on inputs/capital goods and service tax paid on input services on 1.9.2014 or 1.3.2015, as the case may be the above mentioned restrictions are applicable. This restriction is applicable to input service distributor also.

Since in your case huge amount is involved you may request Govt. of India to issue a special order permitting you to take and distribute the credit as one time exception. If the Govt refuses to issue such order then you can challenge the same in the High Court under Article 226 of Constitution of India and get relief. You may request the Principal Chief Commissioner/Principal Commissioner of your jurisdiction to recommend to Govt. of India for granting such relief to you. However they will say that since they are creature of Central Excise Act, 1944 they cannot make such recommendation against the provisions of Central Excise Act or Rules made thereunder. Similar will be the fate if you file an appeal against such communication since CESTAT will also refuse to intervene on the same ground. Therefore the only remedy available is invoking the writ jurisdiction of the High Court. This is my view.

[KASTURI SETHI]

I fully support the views of Sh.Ranganathan, Sir. I think first of all departmental channels must be exhausted. That will cement the appeal to be filed with any court. You have already wasted a considerable period, so there is no harm if a period of one or two/three months more is gone. In view of a huge amount of credit involved, you can also apply for early hearing before the Commissioner (Appeals) or any other Court. Though your appeal may be rejected, yet it will pave the way for High Court or Tribunal. Since it is a question of law, the department's opinion must be the basis for going ahead. Better option is to proceed via departmental channels and do not sit silent.

[BHARAT COKING COAL LIMITED]

Thank you very much,Kasturi Sethi & Ranganathan Sir for your valued opinion...It willbe of great help...

[MUKUND THAKKAR]

VERYUSEFUL AND INFORMATIVE DISCUSSION BY BOTH RESPECTED SIRS, SH.KATURI SETHIJI AND RAJAGOPALAN RANGANTHAN JI.

[Ganeshan Kalyani]

Sir, Sri Mukund Ji, no doubt both the experts are genius and generous in their work. The replies are indeed medicine to the querist. I may not be wrong if the querist approach either of the experts to proceed further in this case. Really the case would be handled nicely. Thanks.