Six Months Time for taking CENVAT Credit - Not Applicable for Re-credit - CBEC Clarifies
THE CENVAT Credit Rules were amended by Notification No. 21/2014-CENT dated 11.7.2014 with effect from 01.09.2014, inter alia to bar CENVAT Credit after six months from the date of the document specified in sub-rule (1) of Rule 9.
Does the time limit of six months apply for re-credit in the following situations?
(i) 3rd proviso to Rule 4(7) of CCR, 2004 prescribes that if the payment of value of input service and service tax payable is not made within three months of date of invoice, bill or challan, then the CENVAT Credit availed is required to be paid back by the manufacturer or service provider. Subsequently, when such payment of value of input service and service tax is made, the amount so paid back can be re-credited.
(ii) According to Rule 3(5B) of CCR, 2004, if the value of any input or capital goods before being put to use on which CENVAT Credit has been taken, is written off or such provisions made in Books of Account, the manufacturer or service provider is required to pay an amount equal to credit so taken. However, when the inputs or capital goods are subsequently used, the amount so paid can be re-credited in the account.
(iii) Rule 4(5)(a) of CCR, 2004 prescribes that in case inputs sent to job worker are not received back within 180 days, the manufacturer or service provider is required to pay an amount equal to credit taken on such inputs in the first instance. However, when the inputs are subsequently received back from job worker, the amount so paid can be re-credited in the account.
Board explains : The purpose of the amendment made by Notification No. 21/2014-CE (NT) dated 11.07.2014 is to ensure that after the issue of a document under sub-rule (1) of Rule 9, credit is taken for the first time within six months of the issue of the document. Once this condition is met, the limitation has no further application .
Board Clarifies : In each of the three situations described above pertaining to Rule 4(7), Rule 3(5B) or Rule 4(5) (a) of CCR, 2004, the limitation of six months would apply when the credit is taken for the first time on an eligible document. It would not apply for taking re-credit of amount reversed, after meeting the conditions prescribed in these rules.
While we should be grateful to the Board for the benign clarification, let us hope the Board would also clarify the position in the following situations:
1. Taking of credit under Rule 16(1) of the Central Excise Rules on duty paid goods brought to a factory for being remade, refined etc.
2. Taking of credit by SSI units on the inputs lying in stock, when they cross the exemption limit and enter the duty-paying arena.
Also see - , & Credit vs. Re-credit
CBEC Circular No.990/14/2014-CX-8., Dated: November 19, 2014