Relief to Nayara Energy: CESTAT dismisses Revenue’s plea levying interest by Commissioner under CENVAT Credit Rules [Read Order]

Relief - Nayara Energy - CESTAT - Revenue’s plea levying interest - Commissioner - CENVAT Credit Rules - Taxscan

In a relief to the Nayara Energy, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench has dismissed the Revenue’s plea levying interest by  Commissioner under CENVAT Credit Rules.

The appellant has explained why it could not immediately avail CENVAT credits on Tanks fabricated in the year 2007. It has been stated that the process of collating and mapping the actual quantity of steel plates issued and consumed in the fabrication of Storage Tanks took some time as the goods were received between 1997-1998 and the fabrication work of Storage Tanks was completed only in the year 2007.

It needs to be noted that under rule 4(1) of the 2004 Credit Rules, it was only in September 2014 that a time limit of 6 months/1 years was prescribed for availing CENVAT credit.

The observations made by the Commissioner in the impugned order that declaration was required to be filed under rule 57(G) of the 1944 Excise Rules, is also not relevant as the eligibility of inputs received by the appellant in the factory was to test in terms of the 2004 Credit Rules and not the rule prevalent earlier, namely rule 57(G) of the 1944 Excise Rules. Even otherwise, the receipt of the HR sheets and Steel Plates were covered under the declarations submitted by the appellant under the erstwhile rule 57(T) of the 1944 Excise Rules. Copies of these declarations have been filed and from the same, it is clear that the HR sheets under Steel Plates had been declared to the Department.

The coram headed by the President, Justice Dilip Gupta, and Technical Member, Raju held that the Commissioner, on his own, examined as to whether the appellant was eligible to avail and utilise CENVAT credit under rule 11 or rule 3(2) of the 2004 Credit Rules. It needs to be noted that the appellant had not made any such claim for availing of the credit.

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