Supplier’s Supplementary Invoices Valid for CENVAT Credit Without Suppression: CESTAT Delhi

Bharat Aluminium Company Limited Vs Commissioner of Central Excise and Service (CESTAT New Delhi)

Summary: CESTAT New Delhi allowed the appeal of Bharat Aluminium Company Limited and set aside the order disallowing CENVAT credit of Rs.6,51,22,158/- availed on supplementary invoices issued by South Eastern Coalfields Limited (SCCL). The Principal Commissioner had ordered recovery under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(4) of the Central Excise Act, 1944, together with interest under Section 11AA and an equal penalty under Rule 15(2) read with Section 11AC.

The dispute was confined to whether supplementary invoices issued by the supplier constituted eligible documents for CENVAT credit under Rule 9(1)(b) of the CENVAT Credit Rules, 2004. Rule 9(1)(b) permits credit on a supplementary invoice but excludes cases where additional duty became recoverable from the supplier because of fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with intent to evade duty.

SCCL had supplied coal to the appellant and initially excluded amounts such as royalty, entry tax and forest transit fees from assessable value, treating them as taxes. After the valuation dispute arose, SCCL paid differential central excise duty and issued supplementary invoices to the appellant. The Commissioner treated the supplier’s short-payment as arising from suppression of facts and consequently denied the appellant credit under Rule 9(1)(b).