CENVAT Credit Demand Is Time-Barred Where Availment Was Known and Suppression Was Not Established.

The appellant claimed CENVAT credit of ₹8,59,346 on 18 invoices for the period April 2013 to March 2014.

During audit, the appellant could not produce all the invoices. It asserted that Anti-Evasion officials had taken the documents and relied on entries in its Input Duty Credit Register, which it said had been attested by the Superintendent, as well as vendor ledger entries and evidence of payment.

The Department issued an audit memo on 31 July 2015 identifying the credit in question; a show-cause notice followed on 6 September 2017.

The lower authorities confirmed the demand, with interest and penalty, and the appellant appealed.

Whether the CENVAT credit could be denied because the appellant had not produced all 18 invoices, despite its accounting records indicating receipt and accounting of the goods.

Whether the show-cause notice issued on 6 September 2017 was time-barred in light of the Department’s knowledge of the issue from the audit memo dated 31 July 2015.

The Tribunal relied on Commissioner of Central Excise, Kolkata v. ITC Ltd., 2013 (291) E.L.T. 377 (Tri.-Kolkata), for the principle that where credit is disclosed in the applicable returns and suppression or misstatement with intent to evade duty is neither admitted nor established, the extended period of limitation cannot be invoked merely because the Department later considers the credit inadmissible.

It also discussed Section 11A(1) of the Central Excise Act, 1944, distinguishing the computation of the limitation period where suppression is established from cases where it is not.

The Tribunal noted that the appellant’s register recorded the receipt of the goods and was stated to have been attested by the Superintendent; it also noted that some invoices had been produced. The show-cause notice did not allege that the goods had not been received.

On limitation, the Tribunal found that the Department was aware of the credit issue by 31 July 2015, as reflected in the Superintendent’s letter, while the show-cause notice was issued more than two years later. Applying ITC Ltd., the Tribunal concluded that the extended period was unavailable in the absence of established suppression.

The Tribunal did not separately determine the ultimate substantive admissibility of the credit; it allowed the appeal on limitation.

It further held that the appellant was entitled to consequential relief, if any, in accordance with law.