Mahindra & Mahindra Ltd. Vs Commissioner of Central Excise & CGST (CESTAT Delhi)
CESTAT Delhi Sets Aside CENVAT Demand Because Extended Limitation Was Invoked Without Proof of Suppression; CESTAT Holds Self-Assessment Regime Does Not Automatically Justify Extended Limitation for CENVAT Recovery; CENVAT Credit Demand Quashed Because Assessee Had Disclosed Credit in ER-1 Returns; CESTAT Delhi Rejects Extended Limitation Since Department Failed to Prove Intent to Evade Duty.
The appeal before CESTAT Delhi was filed against the order dated 09.02.2022 passed by the Commissioner (Appeals), which had upheld an order confirming recovery of allegedly inadmissible CENVAT credit along with interest and penalty.
The appellant operated a Regional Distribution Centre at Jaipur as a “deemed manufacturer” under Section 4A of the Central Excise Act, 1944. The appellant undertook expansion of its facilities and availed CENVAT credit on various input and other services under the CENVAT Credit Rules, 2004. According to the appellant, the availment of such credits had been regularly disclosed in ER-1 returns filed with the department.
During audit of the appellant’s records, the department noticed that CENVAT credit had allegedly been wrongly availed on services used in relation to “setting up” of a unit. Consequently, a show cause notice dated 20.03.2020 was issued demanding recovery of CENVAT credit amounting to Rs.82,55,265 along with interest and penalty for the period April 2015 to June 2017. The extended period of limitation under Section 11A(4) of the Central Excise Act was invoked.
