ITC Limited Wins Appeal on CENVAT Credit Eligibility for Pre-2014 Railway Receipts

CESTAT Kolkata Bench Validates Pre-2014 Railway Receipts and STTG Certificates for CENVAT Credit

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench in Kolkata, delivered a significant judgment favoring M/s ITC Limited in a dispute over the eligibility of CENVAT Credit on railway receipts and STTG Certificates issued by Indian Railways for periods prior to August 27, 2014. The tribunal, comprising Shri R. Muralidhar, Member (Judicial), and Shri K. Anpazhakan, Member (Technical), ruled that such documents remain valid for availing CENVAT Credit, provided they contain all requisite details as per Rule 9(1) of the CENVAT Credit Rules, 2004.

The case stemmed from an appeal filed by ITC Limited against an order from the Principal Commissioner of C.G.S.T. and Central Excise, Kolkata, which had disallowed CENVAT Credit amounting to Rs. 49,16,972 based on the pre-2014 documents. The Revenue had argued that the documents were invalid for the period prior to the inclusion of sub-rule (fa) in Rule 9(1) through Notification No. 26/2014-CE(NT), effective from August 27, 2014.

However, the tribunal, after thorough analysis, concluded that the railway receipts and STTG Certificates issued before this date, containing all necessary details, should still be considered valid for credit purposes. The bench emphasized that the 2014 amendment merely introduced an additional document type without invalidating the existing ones.

The tribunal also set aside the demand for interest and penalty against ITC Limited, underscoring the absence of any irregularity in their credit availing process. This decision aligns with previous tribunal rulings in similar cases involving JSW Steel Ltd. and Jai Balaji Industries Ltd., reinforcing the validity of such documents for credit availment.

Bottom Line:

CENVAT Credit - Railway receipts and STTG certificates issued by Indian Railways are valid documents for availing CENVAT Credit even for the period prior to 27.08.2014, provided they contain all the details as required under Rule 9(1) of the CENVAT Credit Rules, 2004.

Statutory provision(s): Rule 9(1) of the CENVAT Credit Rules, 2004

M/s. ITC Limited v. Commissioner of C.G.S.T. and Central Excise, (CESTAT)(Eastern Zonal Bench: Kolkata)(Regional Bench) : Law Finder Doc Id # 2820816