RAMESH NAIR

1. In the present appeal by the impugned order the Cenvat credit was denied to the appellant on the following grounds:-

(i) Rs. 77,74,439/- the Cenvat credit was taken on the input service after long span of 1 to 4 years. Although the time limit for taking the Cenvat credit on input service has not been prescribed, the normal period of time for demanding duty or service tax is 1 year as per Section 11A and therefore, the appellant should have taken the Cenvat credit within one year and not after longer period.

(ii)Rs. 2,21,112/- the credit of security service was denied as the same was used for the unit as well as the residential premises of the director and branch office.

(iii) Rs. 75,762/- the invoices do not pertain to the appellant.

(iv) Rs. 1,82,602/- the invoices do not contain the service tax registration No. of the supplier of input services.

Being aggrieved by the impugned Order-in-Original, the present appeal is filed by the appellant.

2. Shri Devashish K. Trivedi learned Counsel appearing on behalf of the appellant as regards the credit of Rs. 77,74,439/- it is his submissions that during the relevant period no time limit was prescribed for availing the credit. Therefore, merely by referring to time limit provided under Section 11A, credit cannot be denied. He submits that as regard receipt of input service, use thereof for manufacturing activity, payment of service charges to the provider of the service are not in dispute as the appellant have submitted Chartered Accountant Certificate, the details of their accounts showing payment of service charge to the service provider. Therefore, merely on the grounds of limitation which is not provided in the Cenvat credit Rules, the credit cannot be denied on this ground of limitation.

2.1 As regard the denial of Cenvat credit of Rs. 2,21,112/- , he fairly concede that small part of service is related to the residential premises of the director which the appellant have calculated and reversed the same. Therefore, the remaining credit which is used in the manufacturing activity of the appellant cannot be denied.

2.2 As regards the denial of credit of Rs. 75,762/- it was alleged that the invoices do not pertain to the noticee. However, there is no dispute that the input service was received by the appellant and the invoices were accounted for in the books of account and service was used in the relation to manufacturing operation of the appellant. Therefore, merely because the invoices do not show the name of the appellant credit cannot be denied.

2.3 Regarding the denial of Rs. 1,82,602/- he submits that the credit was denied on the ground that invoices do not contain the service tax registration No. of the supplier of input services. It is his submissions that there is no dispute regarding receipt, use of the input service and payment of invoices to the service provider. Therefore, merely, because the registration No. is not mentioned credit cannot be denied.

2.4 He also submits that the credit was taken during the period January 2009 to August 2011 and the discrepancy was pointed out by the audit. The appellant have been filing monthly returns and therefore, there was no suppression of facts, accordingly the show cause notice issued on 14.03.2013 being beyond 1 year is time barred and the show cause notice is not sustainable on the ground of time limitation also. In support of the above submission he placed reliance on following judgments:-

• 2017 (47) STR 58 (Tri.-Bang.) Diya Systems (Management) Pvt. Ltd. V/s. Commr. of C. Ex., Mangalore
• 2011 (23) STR 661 (Tri-Mumbai) Imagination Technologies India Pvt. Ltd. V/s. Commr. of C. Ex., Pune-III.
• 2010 (18) STR 490 (Tri.-Del.) Secure Meters Ltd. V/s. Commissioner of C.Ex., Jaipur-II.
• 2017 (51) STR 325 (Tri.-Bang.) RR Donnelley India Outsource Pvt. Ltd. V/s. CCE, C & S.T., Trivandrum.
• 2017 (47) STR 70 (Tri.-Bang.) Kemwell Biopharma Pvt. Ltd. V/s. Commr. of C. Ex. & S.T., LTU, Bangalore.
• 2015(39) STR 670 (Tri. Mumbai) Shivraj Cable Network V/s. Commissioner of C.Ex., Raigad.
• 2021 (45) GSTL 184 (Tri. Del.) Rajendra Kumar & Associates V/s. Commr. of Service Tax, Delhi-II.
• 2022 (379) ELT 123 (Tri.-Ahmd.) Essel Propack Ltd. V/s. Commissioner of C.Ex. & S.T., Daman.
• 2010 (262) ELT 983 (Tri.-Ahmd.) Transformers & rectifiers V/s. Commissioner of C.Ex.. Ahmedabad.
• 2011 (273) ELT 535 (Tri.-Ahmd.) Commissioner of Central Excise, Ahmedabad V/s. Pierlita India Pvt. Ltd.
• Circular F. No. 345/2/2000-TRU dtd. 29/08/2000.
• 2013 (287) ELT 321 (Tri.-Del.) Steel Authority of India Ltd. V/s. Commissioner of C.Ex. Raipur.
• 2009 (239) ELT 99 (Tri. Bang.) Coromandel Fertilizers Ltd. V/s. Commr. of C. Ex. (A), Visakhapatnam-IV.
• 2019 (26) GSTL 470 (Del.) Global Ceramics Pvt. Ltd. V/s. Principal Commissioner of C.Ex., Delhi-I.
• 2001 (129) ELT 459 (Tri.-Del.) Steel Authority of India Ltd, V/s. Commissioner of C.Ex., Raipur.
• 2003 (160) ELT 199 (Tri.-Chennai) Tamilnadu Petro products Ltd. V/s. Commissioner of C.Ex. Chennai.

3. On the other hand Shri R.K. Agrawal, learned Superintendent (A.R) appearing on behalf of the revenue reiterates the finding of the impugned order.

4. We have carefully considered the submission made by both sides and perused the record. We find that the reason given for denial of cenvat credit of Rs.77,74,439/- by the Adjudicating Authority that since one year period is provided under Section 11A for demanding of duty the same shall apply for availment of Cenvat credit also. This reason given by the Adjudicating Authority, in our considered view is absolutely absurd and not relevant. The Cenvat Credit Rules, 2004 is independent in itself and in dealing with the Cenvat credit matters, finding given is irrelevant and cannot be imported from the other Rules or Act. Section 11A is strictly for the purpose of issuing show cause notice for demanding of duty even for demanding wrongly availed Cenvat credit, but for the purpose of availment of Cenvat credit, Cenvat Credit Rules, 2004 is applicable. During the relevant period no time limit was prescribed for availment of Cenvat credit in respect of input, input service or capital goods. Therefore, the import of Section 11A to say that 1 year period provided in Section 11A shall apply in the case of availment of Cenvat credit is absolutely illegal, incorrect and imaginary.

4.1 As regards delay at the most genuineness of the receipt of input service, Payment thereof to the service provider, accounting the same in the appellant’s books of account can be verified. In the present case appellant have provided Chartered Accountant certificate, books of account showing payment of service invoices to the supplier of service, this abundantly makes it clear that there is no dispute that the appellant have indeed received the input service and payment thereof was made to the service provider. Therefore, in our considered view Cenvat credit cannot be denied merely because the same was not availed within period of 1 year which is nowhere prescribed in Cenvat credit Rules, 2004. This issue has come up before the Tribunal time and again and the following judgments were passed:

(i) The Hon’ble Delhi High Court in the case of Global Ceramic Pvt Ltd (supra) clearly held that the time limit shall not apply for the period prior to 11.07.2014 when the amendment of 1 year time limit was prescribed. Relevant part of the judgment is reproduced below:-

“11.1 The Court would first like to discuss the decision of the CCESC in the case of BRCPL which has been assailed by the Department in W.P. (C) No. 9152/2016. There BRCPL had imported ceramic tiles falling under the Third Schedule to the CE Act and had alleged to have altered the MRP by reaffixing stickers, and this was deemed to be manufactured. This led to the issuance of SCN not only to BRCPL but certain other entities as well. BRCPL voluntarily deposited Rs. 13 lacs as Central Excise Duty during the course of investigation.

11.2 A SCN came to be issued proposing a demand of CE duty totalling Rs. 3,04,73,655/-. BRCPL and the other entities applied to the CCESC for settlement, accepting the duty liability of Rs. 67,38,815/- and interest liability of Rs. 30,48,639/- accepting that the change in MRP should be deemed to be manufactured. BRCPL claimed that it had already deposited CED of Rs. 67,40,000/- along with interest of Rs. 30,50,000/-. It accordingly requested for waiver of penalty and prosecution and allowing deduction of Cenvat Credit of CVD and settlement of demand on the differential duty.

11.3 Before the CCESC, the Department contended that under Rule 4(1) of the Cenvat Credit Rules, 2004 (‘CCRs’), a time limit of six months from the date of issuance of the copy of the documents specified in Rule 9(1) was imposed for claiming the Cenvat Credit with effect from 1st September, 2014. It was also contended that the applicant had withheld from the Central Excise Authority, information that it had changed the MRP and cleared the final goods with an intention of evading payment of CE duty. It had not followed the proper procedure nor maintained the daily stock account and as such was not eligible to avail the credit of CVD.

11.4 The CCESC took the view that it was a well settled principle that a substantive right cannot be denied because of procedural irregularities. The fact that CVD had been paid at the time of the import, had not been denied by the Department. The law permitted the use of Cenvat credit availed on the CVD paid at the time of import in discharging CE duty liability. Since the change in the CCRs did not have retrospective effect, the availment of Cenvat credit as far as BRCPL is concerned, was not restricted to six months. Relying on the decision in the Osram Surya (P) Ltd. v. Commissioner of Central Excise (supra), the CCESC held that the Cenvat credit could not be denied to BRCPL.

11.5 Consequently, in the final order dated 16th December, 2015, the CCESC settled the differential duty and permitted Cenvat Credit adjustment of the CVD amount paid. Likewise, the interest amount deposited by BRCPL was also allowed to be adjusted. A fine of Rs. 1 lac in lieu of redemption of the goods was imposed for the goods seized from the applicant and a further penalty of Rs. 1 lac was invoked as a condition for grant of immunity from penalty in excess of the said amount.

12. When it came to GCPL, even though, the CCESC followed certain other decisions and declined to concur with the view taken by the CCESC in BRCPL, although it noted that “In the instant case also the conditions are exactly the same as in the case of B.R. Ceramics”. It was observed that in view of the decision of the Supreme Court in Osram Surya (P) Ltd. v. Commissioner of Central Excise (supra), GCPL was not entitled to take the Cenvat credit and therefore it was left to the jurisdictional Commissioner to examine the claim for taking the Cenvat credit. Unlike in the case of BRCPL, a penalty of Rs. 60 lacs was imposed and the CE duty was settled without giving credit of the CVD and interest payment.

13. In CCE, Chennai-I v. Amalgamation Valeo Clutch Pvt. Ltd. (supra), the Madras High Court followed Osram Surya (P) Ltd. v. Commissioner of Central Excise, Indore (supra) to deny Cenvat Credit. A perusal of the said judgment shows that in paragraph 4, it was conceded by the counsel for the Assessee that “the manufacturer cannot take the Modvat Credit after six months from the date of documents specified in First Proviso to Rule 57G of the CE Rules”. Therefore, the decision proceeded on a concession.

14. As far as the decision in Rathi Ispat Ltd. v. CCE, Meerut (supra) is concerned, here the reliance is essentially placed on the decision in Osram Surya (P) Ltd. v. Commissioner of Central Excise, Indore (supra). None of these decisions are of help as far as the Department is concerned.

15. In the present case, we are concerned with the amendment to the Rule 4 of the CCRs with effect from 11th July, 2014, which reads thus :

“Provided also that the manufacturer or the provider of output services shall not take Cenvat credit after 6 months of the date of issue of any of the documents in sub rule (1) of rule 9.”

16. It is in terms of this amendment that it was provided that the Cenvat Credit must be taken within one year of the issue of invoice for input goods or input services.

17. There is substance in the contention of the Learned Counsel for the Assesses in both the cases that the above amended provision cannot be given retrospective effect. As explained in Eicher Motors Ltd. v. Union of India (supra) the rule of lapse of credit lying with it unutilized on the date of amendment, cannot be applied to the goods manufactured prior to the date of the amendment. This is based on the principle that the right to adjustment of tax on final products accrues to an Assessee on the date when they paid the tax on the raw materials and that right would continue until the facility available thereto gets worked out. In fact, the judgment in Osram Surya (P) Ltd. v. Commissioner of Central Excise, Indore (supra) approvingly refers to the judgment in Eicher Motors Ltd. v. Union of India (supra).

18. In the present case, the credit accrued when CVD was paid on finished goods deemed to be cleared from home consumption when the dealers sold the goods at higher price by altering the MRP. The right to the Cenvat credit accrued on the very day when the inputs were received.

19. In Jayam & Co. v. Assistant Commissioner - (2016) 96 VST 1 (SC) = 2018 (19) G.S.T.L. 3 (S.C.), it was held that a provision introduced for the first time cannot be given retrospective effect. It is further held as under :

“11. Now it is a well-settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Volume 36 of the Laws of England (Third Edition) and reiterated in several decisions of this court as well as English Courts is that -

“all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.”

20. Likewise in Samtel India Ltd. v. CCE, Jaipur - 2003 (155) E.L.T. 14 (S.C.), it was held that the right to credit accrued to an Assessee on the date the tax on inputs was paid. Once the inputs were used, the Rule imposing a period of limitation, could not be given retrospective effect.

21. The Gujarat High Court in Filco Trade Centre Pvt. Ltd. v. Union of India (decision dated 5th September, 2018 in SCA No. 18433/2017) [2018 (17) G.S.T.L. 3 (Guj.)] followed the dictum of the Supreme Court in Jayam & Co. v. Assistant Commissioner (supra) and reiterated that the input tax credit could not be denied on the basis of an amendment, which is prospective. The question dealt with by the High Court was whether Section 140A(3)(iv) of the CGST Act, which declined the Cenvat credit in relation to goods purchased prior to one year from the appointed date, could be given retrospective effect. In answering the question in the negative, the Gujarat High Court held as under :

“30. To sum up we are of the opinion that the benefit of credit of eligible duties on the purchases made by the first stage dealer as per the then existing CENVAT credit rules was a vested right. By virtue of clause (iv) of Sub-Section (3) of Section 140A such right has been taken away with retrospective effect in relation to goods which were purchased prior to one year from the appointed day. This retrospectivity given to the provision has no rational or reasonable basis for imposition of the condition. The reasons cited in limiting the exercise of rights have no co-relation with the advent of GST regime. Same factors, parameters and considerations of “in order to co-relate the goods or administrative convenience” prevailed even under the Central Excise Act and the CENVAT Credit Rules when no such restriction was imposed on enjoyment of CENVAT credit in relation to goods purchased prior to one year.”

22. Consequently, in the present case, the Court is satisfied that the Amendment to Rule 4(1) CCRs prescribing a time limit for claiming Cenvat Credit will not apply to the consignments in the present case where the import took place prior to the date of the amendment and the deemed manufacture took place when the MRP was altered, which also happened prior to the amendment. In other words, the CVD paid by the BRCPL will have to be permitted to be adjusted against the CE duty settled as will the service tax paid on the input services.

23. That apart, it is indeed true that the CCESC which heard the settlement application of the GCPL comprised of three members. Therefore, an order passed by just two of them, would obviously be unsustainable in law.

24. For all of the aforementioned reasons, this Court sets aside the impugned order dated 23rd June, 2016 passed by the CCESC in the case of GCPL and permits the adjustment of the CVD in the sum of Rs. 2,80,42,411.00 and service tax to the tune of Rs. 16,51,695.00 against the admitted settled duty liability of Rs. 3,69, 76,139.00. Further, the penalty amount of Rs. 60 lacs is reduced to Rs. 1 lac, as in the case of BRCPL. W.P.(C) No. 6706/2016 is disposed of in the above terms.

25. As far as the Department’s challenge to the decision of the CCESC in the case of the BRCPL is concerned, it is hereby rejected and the W.P. (C) No. 9152/2016 is dismissed. No costs”

(ii) In the case of Essel Propack Ltd. (Supra), this Tribunal held as under:

“4. I have carefully considered the submission made by both the sides and perused the records. The appellant have taken the credit in the month of July, 2013 in respect to the goods received during the period 2009-10 and 2010-11. During that period no time limit was prescribed for taking the credit. Therefore, in my considered view the department cannot import the time limit which is not statutorily stipulated in the law. The time limit has been prescribed by the Notification No. 21/2014-C.E. (N.T.), dated 11-7-2014 whereby the assessee is supposed to take the credit within 6 months/1 year from the date of invoice. Considering this amendment for the past period this Tribunal has considered the similar issue wherein it was held that the invoice issued prior to date of Notification No. 21/2014-C.E. (N.T.), dated 11-7-2014 the Cenvat credit cannot be denied on the ground of limitation. The relevant judgment is as under :

• Alok Master Batches Pvt. Ltd. v. CCE & ST, Daman - 2021-VIL-170 CESTAT-AHD

“4. I have heard both the sides and perused the records. I find that the major issue to be decided is that the cenvat credit was availed after 1-9-2014, in respect of invoices issued prior to 1-9-2014. In the light of the amendment notification no. 21/2014-C.E. (N.T.) whether the claim of cenvat credit is time barred. I find that though there are various decisions on the issue however, the Division Bench in the case of Bharat Aluminium Company Ltd. v. Joint Commissioner of Central Excise, Central Goods and Service Tax, held that the limitation of 6 months provided as per notification no. 21/2014-C.E. (N.T.) is not applicable in cases where the invoices were issued before the notification came into effect i.e. 1-9- 2014. the Delhi bench in said case has relied upon the judgment of Delhi High Court in the case of Global Ceramics Private Limited and Ors. - 2019-TIOL-1129- HC-DEL-CUS. The relevant para of said judgment of Bharat Aluminium Company Ltd. (supra) is reproduced below.

5. Having expressed our anguish, we note that the issue is no more res integra. Reliance can be placed to the following decisions; (i) Indian Potash Ltd. v. Commissioner of Central GST, Meerut [2018 (10) TMI 1367-CESTAT Allahabad] (ii) Hindustan Coca Cola Beverages Pvt. Ltd. v. Commissioner of Central Tax [2018 (10) TMI 1366-CESTAT Bangalore] (iii) Industrial Filters & Fabrics Pvt. Ltd. v. CGST & CE, Indore [2019 (1) TMI 1426-CESTAT New Delhi] (iv) Suryadev Alloys and Power Pvt. Ltd. v. Commissioner of GST & Central Excise, Chennai [2018 (11) TMI 1019-CESTAT Chennai] 4E/53851-53852/2018-[DB] (v) Umesh Engineering Works v. Commissioner of Central Tax, Bengaluru West [2019 (1) TMI 1158-CESTAT Bangalore] (vi) Sarda Energy and Minerals Ltd. v. CCE & ST, Raipur [2019 (4) TMI 473-CESTAT New Delhi] Wherein it was clearly held that the six month limitation provided with effect from 1-9-2014 would not apply to the cenvatable invoices issued prior to said date. The other decisions relied upon by the Ld. Advocate are also to the same effect but multiplying the precedent decisions would not make a difference as it is a settled law. Further, not only various Tribunals’ decisions but Hon’ble Delhi High Court also in case of Global Ceramics Private Limited and Ors. v. The Principal Commissioner of Central Excise and Ors. W.P. (C) 6706/2016 and W.P. (C) 9152/2016 has also observed to the same effect in paragraph 11.4 of their decisions.

6. As such, we find that the issue is no more res integra and stands settled in favour of the assessee. However, the fact that the invoices in question were prior to 1-9-2014 is required to be verified. The Original Adjudicating Authority is directed to do so, with the association of appellant to whom an opportunity would be given.

4.1 In view of the above decision which is based in Delhi High Court judgment of Global Ceramics Private Limited and Ors. (supra), I am of the view that the appellant is entitled for the Cenvat credit since all the invoices on which Cenvat credit was claimed were issued prior to 1-9-2014.

5. The revenue is at liberty to verify this fact, therefore the impugned order is not sustainable and the same is set aside. Since the entire demand is set aside. The personal penalty imposed on Shri Vijay Kumar Srivastaw will also not sustain the same is also set aside. Both the appeals are allowed with consequential relief, if any, in accordance with law.

4.1 This issue has been considered by the Hon’ble Punjab and Haryana High Court in the case of Industrial Cables (supra) wherein the same issue of limitation for availing the Cenvat credit was considered. The Hon’ble High Court has passed the following order :

“5. We have heard Mr. Kamal Sehgal, Learned Counsel for the revenue. The principle question raised before us is whether a period of limitation of 6 months for availing Modvat credit during the relevant period could be introduced when no provision existed. It is relevant to mention that in the present case we are concerned with the period from 4-1-1989 to 1-2-1991. It is significant to notice that Rule 57G of the erstwhile Central Excise Rules, 1944 prescribing limit of six months was introduced on 29-6-1995 which had prospective effect. Therefore, it has to be concluded that no period of limitation was prescribed by any statutory provision. The question is no longer res integra. The Supreme Court in the case of Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. - 2000 (118) E.L.T. 311 (S.C.) = (2000) 5 SCC 299 has held that the period of limitation cannot be imported by the Courts by implication in the absence of a specific provision made in that regard. The view of the Supreme Court is discernible from reading of few lines from para 13 of the judgment, which are as under :-

“13. Any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for the Courts to import any specific period of limitation or implication, where there is really none, though Courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period………”

6. The aforementioned principle has been followed by a Division Bench of Allahabad High Court in the case of Collector of Central Excise, Allahabad v. Ram Swarup Electricals Ltd., 2007 (217) E.L.T. 12. It has been held that amendment to Rule 57G prescribing the limit of six months was introduced on 29-6-1995 which is prospective in its operation and in respect of the period earlier to that no limitation was prescribed. Therefore, it was concluded that any transaction earlier to 29-6-1995 was not to attract the period of limitation of six months and the dealer was within its right to avail the shortfall in the Modvat credit at any time.

7. In the light of the aforementioned principles and precedents, the facts in the present case are required to be examined. The period involved herein range from 4-1-1989 to 1- 2-1991 and would, therefore, not be hit by the amendment made in Rule 57G which was introduced on 29-6-1995. Accordingly, the aforementioned 3 questions of law are answered as under :-

(i) The interpretation of Rule 57G adopted by the Tribunal is incorrect and unjust and, therefore, the period of limitation of six months imported by the tribunal in Rule 57G is unsustainable as the tribunal or the court are not competent to import any specific period of limitation by implication;

(ii) & (iii) In view of answer to the first question, the question Nos. (ii) and (iii) also have to be decided against the revenue and in favour of the dealer.

8. As a sequel to the above discussion, the reference is answered in favour of the dealer and against the revenue.”

4.2 The same issue was considered by Hon’ble Allahabad High Court in the case of Ram Sawrup Electricals Ltd. (supra) wherein the Hon’ble High Court passed the following order :-

4. At the outset it may be mentioned here that except the statement of case sent by the Tribunal there is no document on record. We are proceeding to decide the present Reference on the basis of the record available before us and on the basis of the arguments advanced by the Learned Counsel for the parties. Shri K.C. Sinha submitted that even though during the relevant period there was no limitation provided under Rule 57A of the Central Excise Rules the time limit provided under Section 11B of the Act would be applicable and, therefore, any amount of Modvat credit which has been availed of falls short of the actual amount which could have been availed ought to have been taken credit of within six months and not beyond it. In support of his submission he has relied upon a Division Bench of the Gujarat High Court in the case of Wipro Ltd. v. Union of India [1992 (60) E.L.T. 370]. He submitted that as the period of six months had expired the respondents would not be entitled to avail of the difference in the amount of Modvat credit. Shri Pankaj Bhatia submitted that provisions of Section 11B of the Act is not applicable in a case of Modvat credit as the same is governed by Rules 57A to 57P of the Central Excise Rules, 1944 as held in the case of Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. reported in 2000 (118) E.L.T. 311 (S.C.). He submitted that like provisions of Section 11A of the Act which has been held to be not applicable to the provisions of Rule 57-I of the Act relating to Modvat credit, Section 11B is also not applicable. He further submitted that the Apex Court in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd. [1999 (112) E.L.T. 353] has held that the credit under the Modvat Scheme which is available is indefeasible and it has no co-relation with the raw material and the final product it can be availed at any time. According to him no period of limitation having been prescribed under Section 57A of the Rules, the respondents were entitled to avail the difference of Modvat credit relating to shortfall at any time.

5. We have given our anxious consideration to the various pleas raised by the Learned Counsel for the parties. It is not in dispute that the respondents have availed of the differential amount of duty paid in input as Modvat after a period of six months but on the basis of some documents which they had submitted lesser amount of Modvat credit was availed by them while taking the benefit of Rule 57A of the Central Excise Rules, 1944. In the case of Raghuvar (India) Ltd. (supra) the Apex Court has held as follows :

“13. ……. It is not for the Courts to import any specific period of limitation by implication, where there is really none, though Courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period. Section 11A is not an omnibus provision which provides any period of limitation for all or any and every kind of action to be taken under the Act or the Rules but will be attracted only to cases where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded. The section also provides for an extended period on certain contingencies and situations. The situation on hand and the one which has to be dealt with under Rule 57-I, as it stood unamended, does not fall under any one of those contingencies provided for in Section 11A of the Act. Part AA of the Rules in which Rule 57-I is found included provides a special scheme for earning credit and adjustment of duty paid on excisable goods used in inputs in the manufacture of what is referred to as “final product, and thereby enable the manufacturer to utilize the credit so allowed towards payment of duty of excise leviable on the final products, in the manner and subject to the terms and conditions stipulated therein. The manufacturer, in this case while removing the final product manufactured has adjusted against payment of excise duty on such final product a part or portion of the credit earned by him under the special scheme and what is sought to be really and in substance done is to inform the manufacturer that the adjustment he purported to have made was with an amount not legitimately or factually earned by or due to him. For this purpose, the irregularity and impropriety committed by the manufacturer in maintaining the accounts and the error in the calculation of the credit said to have been earned by him is pointed out and the manufacturer is only directed to reverse the credit so wrongly and undeservedly made by readjustment and if need be, to recover the amount equivalent to such credit wrongly availed of and disallowed by the proper officer. The recovery of credit availed of and utilized in utter breach of the faith and mutual trust and confidence which is the raison d’etre for the proper and successful working of the Modvat scheme and that too in gross violation of the mandatory requirements necessarily to be fulfilled before ever claiming or availing of such benefits cannot be said to be the same as the demand for payment to be made under Section 11A of the Act of any excise duty not levied or paid or has been short levied or short paid. They fall into two distinct and different altogether with basic as well as substantial differences to distinguish them from each other. As a matter of fact, Rule 57-I envisages disallowance of the credit and consequential adjustment in the credit account or the amount current maintained by the manufacturer and if only any such adjustment are not possible proceed to recover the amount equivalent to the credit illegally availed of. Consequently, the situation postulated to be dealt with under Rule 57-I cannot be said to involve a case of manufacture and removal of excisable goods without subjecting such goods to levy or payment of the various nature and category enumerated in Section 11A of the Act on its own terms will have no application or operation to cases covered under Rule 57-I of the Rules.

14…….The provisions contained in Section 11A are general in nature and application and the Modvat Scheme being a specific and special beneficial scheme, with self-contained procedure, manner and method for its implementation, providing for its own remedies to undo any mischief committed by the manufacturer in abuses thereof, the provisions of the said special scheme alone will govern such a situation and there is no scope of reading the stipulations contained in the general provisions like Section 11A into the provisions of the Rules in question which alone will govern in its entirety the enforcement of the Modvat Scheme. The question as to the relative nature of the provisions general or special has to be determined, with reference to the area and extent of their application either generally in all circumstances or specially in particular situations and not on the ground that one is a mere provision in the Act and the other is a provisions in the Rule. We are not also concerned in this case with any challenge to the inconsistency of a rule with any statutory provisions in the Act.

15…….The restricted operation of the provisions contained in Section 11A is found inherently in built due to the specification of the various categories of cases enumerated in the provision itself to be dealt with. The scheme of Modvat introduced for the first time in 1986 did not consider it necessary either to have its own period of limitation in built in the Rules nor has the enforcement of the scheme been made subject to Section 11A of the Act. The fact that even when an amendment was made on 6-10-1988, it was prospective in nature and the amendment was not given any retrospective effect indicates the intention unmistakably that the subsequent amendment should have no impart on the construction to be placed on the provisions as it existed before such amendment. The further fact that the amendments to Rule 57-I had its own pattern of limitation and method of computation of such limitation also would militate against the manner of construction adopted by the decisions of the High Courts other than that of the Gujarat High Court.”

6. In the case of Dai Ichi Karkaria Ltd. (supra) the Apex Court has held as follows :

“17. It is clear from these Rules, as we read them, that a manufacturer obtains credit of the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtained an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules, which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken in which event it stands cancelled or, if utilized, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore indefeasible. It should also be noted that there is no correlation of the raw material and the final product; that is to say, it is not as if credit can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available.

18. It is therefore, that in the case of Eicher Motors Ltd. v. Union of India [1999 (106) E.L.T. 3] this Court said that a credit under the Modvat scheme was “as good as tax paid”.”

7. In view of the principle laid down by the Apex Court in Raghuvar (India) Ltd. (supra) provisions of Section 11A of the Act is not attracted and cannot be imparted in respect of the Rules framed for availing of the Modvat, the same principle would apply for the purpose of Section 11B of the Act also. In view of the decision of the Apex Court in Raghuvar (India) Ltd. (supra) the law laid down by the Gujarat High Court in the case of Wipro Ltd. (supra) cannot be said to be a good law any more. We are, therefore, of the considered opinion that provisions of Section 11B of the Act is not attracted in the case of Modvat which is governed by Rules 57A to 57P. Further, during the relevant period no limitation had been provided for availing of the Modvat credit and the amendment in Rule 57G prescribing the limit of six months was introduced on 29th June, 1995 which has prospective effect. Thus, the respondents were within their right to avail the shortfall in the Modvat credit at any time.

8. In view of the foregoing discussions, we answer the questions referred to us in favour of the assessee and against the Revenue. There will be no order as to costs.”

5. In view of the above settled legal position of law the Cenvat credit cannot be denied on the ground of limitation in absence of any statutory time limit prescribed.

6. Therefore, the impugned order is not sustainable hence the same is set aside. Appeal is allowed”.

From the above decision of Hon’ble High Court as well as this Tribunal decision it can be seen that various judgments were passed which were relied upon in the above two decisions and it was consistently held that the period of 1 year is not applicable during the period when there was no time limit prescribed for availment of Cenvat credit. Therefore, we are of the clear view that the appellant are eligible for Cenvat credit of Rs. 77,74,439/-.

4.2 As regards the denial of credit of Rs. 2,21,112/-, the same was denied in respect of security service on the ground that the security service was used for the residential premises of the Director and branch office.

4.3 We find that very small portion of the service was used in respect of the residential premises of the Director. However, remaining majority of portion of service was used in relation to the business activity by the appellant. Therefore, only the Cenvat credit attributed to the input security service related to the residential premises of Director shall not be available. However, the appellant have reversed the Cenvat credit of Rs. 8189/-. In respect of security service related residential premises of the Director the said reversal is upheld and maintained. However, the remaining amount of Cenvat credit of security service is admissible to the appellant.

4.2 In the impugned order the credit of Rs. 75,762/- was denied on the allegation that the invoices do not pertain to the appellant. We find that though the invoices copy is not available, however, there is no case of the department that the input service related to this credit was not received by the appellant and used for their overall business operation. It is the submission of the appellant that the invoices were accounted for in the books of account. Therefore, the receipt of service and use thereof is not in dispute, merely because name of the appellant is not mentioned or incorrectly mentioned the credit cannot be denied for this clerical error. Accordingly, we are of the view that the appellant is eligible for Cenvat credit of Rs. 75,752/- also.

4.3 Impugned order has also denied Cenvat credit of 1,82,602/-. Only on the ground that invoices do not contain the service tax registration of the supplier of input services. We find that except this small lapse there is no dispute that the appellant have received the invoices, services and the payment of such invoices to the supplier of input service. Therefore, merely because registration no. is not mentioned credit cannot be denied. This issue has been considered by this Tribunal time and again, some of the judgments are reproduced below:

(i) In the case of Diya Systems (Management) (Supra) the Hon’ble Banglore Bench of Tribunal has passed the following decision:

“3. I have heard the learned Counsel for the parties and perused the records. The only question which needs to be decided by me in all these three appeals is whether the rejection of refund claim by the authorities below mainly on the ground that the appellants were not registered under “Business Support Services” for the BPO activity and whether the refund claim for Rs. 20,600/- (Rupees Twenty Thousand Six Hundred only) pertaining to the bill issued by the BSNL is in conformity with Rule 4A of the Service Tax Rules, 1994 read with sub-rules (1) and (2) of Rule 9 of Cenvat Credit Rules, 2004 is legally justified or not It is pertinent to note that the Commissioner (Appeals) in the impugned order has held that the appellant is an EOU and they are eligible for filing the refund claim on quarterly basis and it is not mandatory for an EOU to file refund claim on monthly basis. Further I find that it is undisputed that appellants are already registered with the department as a service provider under the taxable category of “Information Technology Service” w.e.f. 19-9-2008. Further as per the Rules and the Notification No. 05/2006, dated 14-3-2006 it is not required to be registered under any specific category for claiming the refund as long as the service provider is registered with the Department. On this the learned appellant relied on the decisions in the case of Cbay Systems (India) Pvt. Ltd. v. CCE reported in 2010-TMI-78580-CESTAT-MUMBAI = 2011 (21) S.T.R. 668 (Tribunal) wherein the Hon’ble Tribunal has held that denial of refund claim on the ground that the appellant is not registered under the category of ‘Business Auxiliary Service’ is not sustainable and refund is to be allowed. Similarly in the case of CCE, Ahmedabad v. Dishman Pharmaceuticals & Chemicals Ltd. reported in 2010-TIOL-1639- CESTAT-AHM = 2011 (21) S.T.R. 246 (Tribunal) has also held that service provider was registered under different category cannot be made a basis for denial of refund claim. Further I also find that the appellants are into the business of IT and IT Enabled services and are not engaged in the business of Call centres, telecasters and customer care service, etc. They only provided technical online services based on the requirement of their client which would fall in the category of ‘Information Technology Services’ for which they are already registered. Therefore, in my considered view denial of refund of Cenvat credit is not justified. Secondly the other ground on which refund of Cenvat credit of Rs. 20,600/- (Rupees Twenty Thousand Six Hundred only) relating to invoice issued by BSNL is rejected because the invoice issued by BSNL is not in conformity with Rule 4A and Rule 9 of Cenvat Credit Rules, 2004 is also not justified. This rejection is not justified as the invoice contained all the details except the Service Tax Registration number of BSNL is not mentioned which according to me is only an inadvertent error as the Service Tax Registration number is mentioned in the invoice raised by BSNL for telephone connection. In the case of Imagination Technologies India P. Ltd. v. CCE, Pune reported in 2011 (23) S.T.R. 661 (Tri.-Mum.) wherein, it was held that Cenvat credit cannot be denied on the ground that registration number was not mentioned on the invoices so long as payment of tax and utilization of the service is not disputed. Similarly the Tribunal in the case of Secure Meters Ltd. v. CCE, Jaipur reported in 2010 (18) S.T.R. 490 (Tri.-Del.) it has been held that when the receipt of input services is not disputed and the fact that the input service had been used for providing the taxable output services is not disputed, the credit of service tax on input services cannot be denied on the ground that service tax registration was not mentioned on the invoices. Further I also find that in these cases refund has been denied merely on technical lapses or non-compliance of minor procedural formality. In view of the aforesaid in my considered view, the impugned order is not sustainable in law and I set aside the impugned order by allowing all the three appeals of the appellant with consequential relief, if any.”

(iii) In the case of Imagination Technologies India Pvt Ltd. (supra) Mumbai Tribunal has passed the following order:

“6. As regards the second issue regarding denial of CENVAT Credit on account of not indicating registration number of the input service provider on the invoices, this issue also has been settled by the decision of this Tribunal in the case of Secure Meters Ltd. (supra). In the said order, it was held that credit cannot be denied on the basis of invoices wherein registration numbers were not mentioned so long as the payment of tax was established and the said input service was utilized in the provisions of output service. In the instant case as can bee seen from the order of the adjudicating authority the receipt of the service, its utilization and payment for the service are clearly established from the records maintained by the party and produced before the adjudicating authority. Therefore, in deference to the judgment cited above, I am of the view that the appellant is eligible for the amount of service tax credit and consequent refund in respect thereof

7. The last issue for decision is regarding eligibility to CENVAT credit of the service tax paid on repair of coffee machine. The coffee machine has been maintained by the appellant for vending of coffee to its employees. It is the nature of a catering service provided to the employees which is very essential, especially for the employees working round the clock as in the case of IT companies. Therefore, repair of the coffee vending machine is an input service in or in relation to the output service provided by the appellant and therefore they are rightly entitled to the service tax paid on the repair of the coffee vending machine as it is an eligible input service.

8. In sum, I allow the appeals filed by the appellant in this case with consequential relief, if any.”

(iv) In the case of Secure Meters Ltd (supra) Delhi Tribunal has passed the following order:

“3. I have carefully considered the submissions from both the sides and perused the records. In this case, there is no dispute about the fact that the appellant had received certain taxable services from M/s. Mother Power House Pvt. Ltd. and Vision Tech. during the period from December, 2003 to December, 2004, while at that time, the service providers i.e. M/s. Mother Power House Pvt. Ltd. and Vision Tech. were not registered and the invoices issued by them did not mention any Service tax registration no. That they subsequently took the service tax Registration and paid Service tax under supplementary invoice dated 14-9-04, 23-12-03 and 23-12-04 is also not under dispute. There is also no dispute that input services have been used by the appellant for providing output services which are taxable. In view of this, it is not correct to deny the service tax credit on the basis of the above mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service tax registration no. in the invoices. When the receipt of input services is not disputed and the fact that the input service had been used for providing the taxable output services is not disputed, the credit of Service tax on the input services even if paid subsequently under supplementary invoices, cannot be denied. The impugned order, therefore, is not sustainable and the same is set aside. The appeal is allowed with consequential relief.”

(v) In the case of R.R. Donnelley India Out Source Pvt. Ltd. (supra) Tribunal has passed the following decision:

“6. After considering the submissions of both the parties and the perusal of the records and the judgments cited supra, I am of the opinion that the impugned order is not sustainable in law as the appellant has given sufficient documentary evidence and the decisions of the Tribunal in support of his claim. But the learned Commissioner has failed to consider those submissions and documents and also the judgments cited by the appellant in support of his claim. As far as first ground on which Cenvat credit was denied is totally wrong because the change of name does not make the appellant ineligible to claim Cenvat credit and more so it has been informed to the Department well in time. Secondly, with regard to Management, Maintenance or Repair Service, the lower authority has wrongly considered it as an ‘export of service’ whereas it is ‘import of service’ as evidenced by the Service Tax Returns. Similarly, I am of the opinion that the denial of credit on the ground that registration number of service provider is not mentioned in the invoices is not sustainable in law when the appellant has duly paid the tax to the vendor. Similarly, I also hold that appellant is entitled to Cenvat credit on input services in the nature of Car Parking and Photography Services in view of the reasons stated supra. Therefore, considering all the submissions of both the parties, I set aside the impugned order and allow both the appeals by way of remand to the original authority to examine all the documents produced by the appellant in support of his case and then pass a reasoned order keeping in view the various case laws cited supra. Consequently, both the appeals are allowed by way of remand.”

From the above consistent view taken by the Tribunal, it is settled that merely because service tax registration was not mentioned on the invoices credit cannot be denied. The ratio of the judgments are directly applicable in the present case particularly when there is no dispute about receipt of service and use thereof, and the payment of service bills to service providers. Therefore, in this fact the appellant are eligible for Cenvat credit on the invoices which are not bearing the registration number.

As per the above discussion and finding appellant are eligible for Cenvat credit, on all the counts as discussed above.

5. Accordingly, impugned order is modified in the above terms and the appeal is allowed with consequential relief.