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time limit for excise credit

CA O.P. SINGH (O P Singh & Co.) (426 Points)

15 July 2008

if one has not taken cenvat credit due to non availability of document on that time, can he avail the same after receipt of proper documents? if yes , then is there any time limit for taking credit?

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4 Replies

GAURAV GUPTA (service) (138 Points)
Replied 15 July 2008

There is no timelimit for the availment of credit

The credit of input or capital goods may be taken as soon as these goods are received in the factory of manufacturer or the premisis of output service provider along with the excise invoice.

If the credit is not availed at that time it donot lapse that credit may be utilised at any time thereafter as per cenvat credit rules 2004

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CA O.P. SINGH (O P Singh & Co.) (426 Points)
Replied 15 July 2008

Originally posted by :GAURAV GUPTA
"	There is no timelimit for the availment of credit The credit of input or capital goods may be taken as soon as these goods are received in the factory of manufacturer or the premisis of output service provider along with the excise invoice. If the credit is not availed at that time it donot lapse that credit may be utilised at any time thereafter as per cenvat credit rules 2004	"

thanks for your quick reply

i just want one more favour ..can you tell me the rule no. for the same..

OFFICESELVA (Service) (515 Points)
Replied 15 July 2008

I think that Tribunal has held that one year as the maximum period on whcih credit can be availed.

Sanjay Dwivedi (Advocate & Consultant) (143 Points)
Replied 24 July 2008

The law does not fix any time limit within which credit must be taken. As Mr. Gaurav Gupta has rightly pointed Rule 3 of the Cenvat Credit Rules, 2004 says that the credit may be taken immediately on receipt of the inputs in factory.

However, when there is no time limit prescribed for performance of an act, it must be performed within reasonable period. [Principle of Indian Contract Act applies].

Earlier, when the time limit available to department for issuing notice was six months, 'six month' was considered as the reasonable period. Since the present period of limitation is one year, the 'reasonable period' is also one year.

Tribunal has upheld this view.