Case Law Details
M/s Sanwariya Tiles Pvt. Ltd Vs CEC&CGST (CESTAT Delhi)
There is no dispute about the appellant’s entitlement to avail the credit of the inputs lying in stock as on the date of their crossing the exemption limit, in terms of Rule 3(2) of the Cenvat Credit Rules, 2004. There is also no dispute about the quantum of inputs lying in stock, either as such or as contained in final product lying in stock. The only objection of the Revenue is in terms of Rule 4(1) of the Cenvat Credit Rules which permits availment of credit within a period of six months from the date of issuance of the document.
If the said objection of the Revenue is upheld, an assessee crossing the exemption limit on a particular date, would not be able to avail the credit, thus making the provisions of Rule 3(2), as infructuous. Admittedly, the appellants were not in a position to avail the credit immediately on receipt of the goods or within a period of six months from the issuance of bills of entry, as long as they were working under the small scale exemption notification. Their right to avail the credit would arise only on crossing the exemption limit. Such right specifically stands extended to them by the provisions of Rule 3(2) of the Cenvat Credit Rules and cannot be extinguished by making reference to Rule 4(1). Rule 4(1) which provide for availment of credit within a period of six months from the relevant document applies whether an assessee is already working under the cenvat credit scheme and is availing the cenvat on regular basis. A harmonious interpretation of both the rules leads to the above conclusion. By referring to one provision of law, the other provision cannot be made otiose, as per the settled principle of interpretation. It is not the appellant’s fault that they crossed the exemption limit after the period of six months from the date of receipt of the inputs. It is also well settled principle of interpretation that a particular provision of law should not be interpreted in a manner so as to render the other provision as inapplicable or ineffective. Substantive right provided under the law cannot be denied by referring to other provision, if such substantive right is otherwise available to an assessee.
In such a scenario, by adopting the principles of harmonious construction and interpretation of rule, I hold that the appellant right to avail the credit at the time of coming out of the exemption scheme cannot be curtailed down by adopting Rule 4(1) of the Cenvat Credit Rules.
FULL TEXT OF THE CESTAT JUDGMENT
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