CESTAT rules on Cenvat credit denial; extended limitation period applies only for April-June 2017.

The CESTAT New Delhi ruled on an appeal regarding the denial of Cenvat credit worth Rs.10,29,476 for April 2015 to June 2017. The Tribunal found that the appellant, engaged in manufacturing, had filed returns consistently from April 2015 to March 2017, showing compliance and negating willful suppression. However, for April 2017 to June 2017, where returns were not filed, the extended period of limitation was applicable. The Tribunal concluded that the demand for the extended period was unsustainable except for the latter period, directing the appellant to reverse the ineligible credit with interest, thereby disposing of the appeal.

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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.

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