Cenvat credit

This query is : Resolved

Prashant (Querist)
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14 August 2014 We are in to Service Organization and we have huge accumulated credit but we are unable to utilize the same because our monthly liability is not that big to set off the complete credit
Some credit is pertaining to the input invoices of 2012,2013 etc.
In view of recent budget amendments, we need to claim the credit before 31-Aug-14 other wise it will be lapsed.
So wanted to understand what is the real budget amendment for the claiming of CENVAT credit
I believe many companies will have same issue that they might have credit avaialable with them but cannot use it because they might not have liability to set it off
E.g.
Credit Avaialable is say 5 crores and monthlly ST laibility is say 50 lacs. So as per new Budget changes, if one does not use the entire 5 crores credit, it will be lapsed. So in this case we can use maximum 50 lacs so balance 4.5 crores will be lost. Is the understanding correct

What is the real provisions and how can we overcome these situations

Annu Agarwal

Annu Agarwal (Expert)
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16 August 2014 As per my view the amendment is not retrospective ,so for invoices issued before 01.09.2014 there should not be any such time limit for availment of cenvat credit.
For invoices issued after 01.09.2014 the limit applies.
In support of this, reference can be made to Universal Drinks Private Ltd., Nagpur vs. UOI and another [1984(18) E.L.T.207(Bom.)which was
in the context of change of time period of claiming refund under
rule 11 from 1 year to 6 months,and
it was held that the new rule 11 was prospective in its operation and would apply to the cases in which the right of claim refund arose after it came into force.A similarposition was taken by the Larger Bench of the Hon’ble Tribunal in Rajasthan Worsted Spinning Mills vs.
CCE [1990 (47) E.L.T. 483 (Tribunal).

So as per my view the amendment shall cover invoices issued from 01.09.2014.

I would request other experts to give their views for the same.