IMPORTANT POINT
The central legal point established in the judgment is that there is no requirement to claim CENVAT credit only in the year of procurement, and the credit can be availed in subsequent financial years upon installation in the factory.

JUDGMENT :

Suman Shyam, J.

Heard Mr. D. Saraf, learned counsel appearing for the appellant. Also heard Mr. S. C. Keyal, learned counsel representing the respondent.

2. This appeal has been preferred by the assessee (M/S Premier Cryogenics Limited) assailing the order dated 02.05.2018 passed by the learned Central Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata in Excise Appeal No.E/75264/15, partly allowing the appeal filed by the assessee against the order dated 25.11.2014 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Guwahati.

3. The facts of the case, in a nutshell, are that the appellant herein is engaged in the business of manufacture of oxygen/nitrogen and is registered under the Central Excise Department vide Registration No.AABCP6683NXM001 and Service Tax Registration No.AABCP6683NXM001 having its manufacturing unit at Saukuchi, Lokhra Road, Guwahati, Assam. The manufacturing unit of the appellant commenced its commercial production on 26.03.2004. Under the Notification No.32/99-CE dated 08.07.1999 issued by the Central Government, the appellant was entitled to exemption on the credit of CENVAT including exemption on capital expenditure. As per the projection made in this appeal, the appellant had procured capital goods from M/S INOX Air Products Ltd. for use in the factory during the year 2007-08. However, the plants and machineries so procured during the year 2007-08 were not installed/put to use in the factory until the year 2011. The assessee had availed CENVAT credit amounting to a sum of Rs.22,93,920/-during the financial year 2010-11 and 2011-12 on capital goods received during the months of November, 2007, December, 2007 and January, 2008. According to the Revenue, CENVAT credit amounting to Rs.22,93,920/-against capital goods was available to the assessee only during the financial years 2007-08 and 2008-09 in terms of Rule 4(2) of the Cenvat Credit Rules. Therefore, the assessee could have utilized the Cenvat Credit upto 50% towards payment of Central excise duty only in those financial years and the balance 50% could have been used in the subsequent financial years.

4. Although the assessee had claimed that these facts were within the knowledge of the jurisdictional authorities, yet, according to the Revenue, the fact that the machineries were procured in 2007 and 2008 were not disclosed by the assessee. It was only during an audit inspection that these facts come to light. As such, vide Show Cause notice dated 18.12.2012 the assesee was asked to show cause as to why the erroneous refund of excise duty amounting to Rs.15,95,332/-sanctioned during the period from November 2007 to January, 2008 as well as the wrongful availment of CENVAT credit amounting to Rs.22,93,920/-during the financial years 2010-11 and 2011-12 should not be recovered from the assessee.

5. Based on the proceedings initiated on the basis of the aforementioned show cause notice, the Additional Commissioner of Central Excise and Service Tax, Guwahati had passed Order –in-Original No.39/Addl.Commr/BT/CE/ GHY/12-13 dated 29.05.2013 whereby, it was held that the amount demanded by the Revenue was not recoverable from the assessee under the law. Aggrieved by the order dated 29.05.2013, the Revenue went in appeal before the Commissioner (Appeals) Customs, Central Excise & Service Tax (NER), Guwahati. By the order dated 25.11.2014, the Commissioner (Appeals) Customs, Central Excise & Service Tax (NER) had interfered with the Order-in-Original dated 29.05.2013, thus allowing the appeal filed by the Revenue. The operative part of the order dated 25.11.2014 is reproduced herein below for ready reference :-

“12. I have gone through the records of the case and submissions made in the appeal. The issue to be decided in this case is that whether the appellants can take/utilize Cenvat credit during the month subsequent to the months in which these were available when the appellants are availing exemption under the not