Cenvat credit on supplementary invoice fails where no additional duty arose, while suppression supports extended limitation and penalty.

A supplementary invoice supports Cenvat credit only where it is issued for additional duty actually payable under Rule 7; on these facts, the moulds had been supplied without an invoice at delivery, so the later invoice could not validly sustain credit. Misdeclaration of the receipt date and treatment of the entry as a regular invoice amounted to suppression with intent to evade duty, so the extended limitation period applied and penalty under Section 11AC followed. The credit was disallowed and the demand with penalty was sustained.

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Issues: (i) whether Cenvat credit could be taken on the basis of the supplementary invoice issued for the moulds, and (ii) whether the demand and penalty were sustainable on the ground of limitation and suppression of facts.

Issue (i): whether Cenvat credit could be taken on the basis of the supplementary invoice issued for the moulds

Analysis: Rule 7(1)(b) of the Cenvat Credit Rules, 2002 permits a supplementary invoice where additional excise duty or additional customs duty has become payable. The moulds were originally supplied without any invoice at the time of delivery, and no question of additional duty arising from an earlier invoice under Rule 7(1)(a) arose on these facts. The supplementary invoice issued later could not, therefore, be treated as a valid for taking credit.

Conclusion: Credit taken on the basis of the supplementary invoice was not sustainable and the finding against the assessee on this issue was upheld.

Issue (ii): whether the demand and penalty were sustainable on the ground of limitation and suppression of facts

Analysis: The receipt of the goods was shown in the records as having occurred in 2002 instead of 1994, and the invoice entry was misdeclared as a regular invoice. On that basis, the adjudicating authority found wilful misdeclaration with intent to evade duty. Where suppression of facts with intent to evade duty is established, the extended period of limitation is invocable and penalty under Section 11AC of the Central Excise Act, 1944 follows.

Conclusion: The demand was not barred by limitation and the penalty was justified against the assessee.

Final Conclusion: The appeal failed in full, with the credit disallowed and the demand, limitation finding, and penalty all sustained.

Ratio Decidendi: A supplementary invoice is valid for Cenvat credit only when it is issued in respect of additional duty actually paid in the circumstances contemplated by Rule 7, and wilful misdeclaration with intent to evade duty attracts the extended limitation period and penalty.

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