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2026 Supreme(Online)(CESTAT) 2535
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL EASTERN ZONAL BENCH: KOLKATA
R. Muralidhar, Judicial Member, K. Anpazhakan, Technical Member
Steel Authority Of India Ltd – Appellant
Versus
Durgapur – Respondent
Excise Appeal No. 75123 of 2017
For the Appellants/Petitioners: Abhijit Biswas
For the Respondents: Sameer Chitkara, Prasenjit Das
A procedural amendment introducing a time limit for availing Cenvat credit cannot be applied retrospectively to invoices issued before the amendment's effective date, as it would impermissibly curtail a vested substantive right that accrued upon receipt of the inputs.
Headnote:The case involves the disallowance of Cenvat credit under Rule 4(1) of the Cenvat Credit Rules, 2004, read with Notification No. 21/2014-CE (NT). The appellant availed credit for inputs and input services received between May 2014 and August 2014 during the period of November 2014 to February 2015. The lower authority disallowed the credit on the grounds that it was availed beyond the six-month time limit prescribed by the amendment. The court found that the inputs were received before the amendment introducing the time limit came into effect. The primary issue is whether the six-month limitation period prescribed under the Third Proviso to Rule 4(1) and Sixth Proviso to Rule 4(7) of the Cenvat Credit Rules applies to invoices issued prior to the effective date of the amendment. The court reasoned that the right to avail credit is a substantive right that accrues upon the receipt of inputs in the factory. It held that a subsequent procedural amendment cannot retrospectively curtail a vested right unless the amending provision is expressly retrospective. In the result, we set aside the impugned order and allow the appeal filed by the Appellant with consequential relief, if any, as per law.
Order:
[ PER SHRI K. ANPAZHAKAN]
The instant appeal has been filed against the Order-in-Original No. DGR-EXCUS-000-COM-015-16-17 dated October 19, 2016 passed by the Commissioner of Customs, Central Excise & Service Tax, Durgapur Commissionerate, Satyajit Roy Sarani, City Centre, Durgapur, whereby he has disallowed the Cenvat credit of Rs. 2,29,93,851/- availed by M/s. Steel Authority of India (herein after referred as the Appellant) during the period September 2014 to February 2015. The impugned order also confirmed the demand of interest and imposed penalty of Rs.1,14,96,926/- upon the appellant under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC of the Central Excise Act, 1944.
The facts of the case are that the appellant is a Government of India Undertaking having integrated steel plants at different places in the country. One such steel plant of the appellant, Durgapur Steel Plant (“DSP” in short) is situated in Durgapur in the district of Burdwan in the State of West Bengal. The present appeal relates to the said Durgapur Steel Plant of the appellant.
DSP manufactures various iron & steel and other byproducts falling under various Chapter Headings of the First Schedule to the Central Excise Tariff Act, 1985 including Chapters 72, 73, 84, 86, 27, 28 and 29. DSP is duly registered under the provisions of the Central Excise Act, 1944 to carrying out manufacturing activity in the said steel plant. The appellant, avails of cenvat credit facility on inputs, capital goods and input services which are received in its factory and used for the manufacture of dutiable final products therein. The number of invoices relating to inputs and input services received by the appellant being huge in a particular year there is a time lag between the date of receipt of the said inputs and availment of input services in the factory and taking credit thereof in the RG-23A Part II register.
On a review of input credit statement submitted by the appellant for the months of November 2014 to February 2015, it appeared to the department that the appellant had taken credit on input invoices issued during the months of May 2014, June 2014, July 2014 and August 2014 respectively in the months of November 2014 to February 2015, which was beyond the period of 6 months, prescribed under Rule 4(1) of the Cenvat Credit Rules, 2004 read with Notification No. 21/2014-CE (NT) dated July 11, 2014. Accordingly, a show cause notice was issued by the Commissioner of Central Excise, Customs and Service Tax, Durgapur Commissionerate, Durgapur, requiring the appellant to show cause as to why the alleged irregular cenvat credit, amounting to Rs.2,23,34,016/- (including education cess and secondary & higher education cess), availed and utilised wrongly during November 2014 to February 2015 should not be demanded and recovered from the appellant along with interest and penalty. Two more show cause notices have been issued to the Appellant on the same allegation proposing disallowance of Cenvat credit of Rs.4,21,189/- availed and utilised during the period December 2014 to February 2015 and Cenvat credit of Rs.2,38,646/- availed and utilised wrongly during the period September 2014 to November 2014 .
As the issue involved are the same, all the three show cause notices have been adjudicated vide a common Order-in-Original No. DGR-EXCUS-000-COM-015-16-17 dated October 19, 2016, confirming the disallowance of Cenvat credit availed along with interest and penalty. Aggrieved against the confirmation of the disallowance of Cenvat credit along with interest and penalty, the Appellant has filed this appeal.
The Appellant submits that the Ld. Commissioner failed to appreciate that the appellant had become entitled to take the credit on the subject input and input services having received the same prior to the date of coming into effect of the Third and Sixth Provisos of Rule 4(1) and Rule 4(7) of the Cenvat Credit Rules respectively and had us
