2025 (2) TMI 371 - AT - Central Excise

Denial of CENVAT Credit - appellant did not provide the required documents at the time of investigation itself - suppression of facts or not - time limitation - HELD THAT - In this case it is not disputed by the learned Authorized Representative that for the period April 2015 to March 2017 appellant is filing their ER-1 returns which is evident from the show cause notice itself. If there is minor discrepancy in the documents for availment of Cenvat credit it cannot be alleged that appellant has willfully suppressed the fact with intent to evade payment of duty. For the period April 2017 to June 2017 appellant did not file their ER-1 returns therefore for the said period extended period of limitation is rightly invoked by the adjudicating authority. Conclusion - i) If there is minor discrepancy in the documents for availment of Cenvat credit it cannot be alleged that appellant has willfully suppressed the fact with intent to evade payment of duty. ii) The demand pertaining to extended period of limitation except for the period April 2017 to June 2017 is not sustainable. Therefore the appellant is liable to reverse the ineligible Cenvat credit for the period April 2015 to June 2017 along with interest. Appeal disposed off.

Summary

The Appellate Tribunal, CESTAT New Delhi, heard an appeal concerning the denial of Cenvat credit amounting to Rs.10,29,476 for the period April 2015 to June 2017. The appellant, engaged in manufacturing EQT cranes and air tanks, had been regularly filing returns except for the mentioned period. An audit revealed an excess credit taken by the appellant, leading to the denial of credit through a show cause notice. The appellant argued against the extended period of limitation, citing a previous Tribunal decision. The respondent contended that the appellant's failure to provide documents during the investigation constituted suppression of facts.The Tribunal noted that the appellant had consistently filed returns from April 2015 to March 2017, indicating compliance. Minor discrepancies in documents did not amount to willful suppression. However, for the period April 2017 to June 2017, where returns were not filed, the extended period of limitation was justified. Referring to a previous case involving service tax credit, the Tribunal emphasized that the mere detection of ineligible credits during routine audit did not warrant invoking the extended period for fraud allegations. The demand for the extended period, except for April 2017 to June 2017, was deemed unsustainable. Consequently, the appellant was directed to reverse the ineligible Cenvat credit for the period in question along with interest, leading to the disposal of the appeal.