The Service Tax Commissionerate, Delhi has issued Demand Cum show cause notice to M/s Bharti Airtel Limited, Gurgaon for Rs 46.26 Crore. The notice was issued on the basis of the Special Audit conducted by a Cost Accountant under Section 14AA of the Central Excise Act which has been made applicable for the Service Tax since 2007.

The main issue involved is the wrong availment of Cenvat Credit on the capital goods like towers, shelters etc which are not covered under the definition of capital goods as per the law. The other issues involve availment of Cenvat credit two times on the strength of same invoice, availment of Cenvat credit without any supporting documents.

The assessee has so far deposited an amount of Rs. 31.01 lac in this case.

Cenvat credit misuse flagged after special audit, alleging ineligible capital goods claims, duplicate credits, and missing documentation. A Demand-cum-Show Cause notice followed a statutory special audit alleging wrongful availment of Cenvat credit on items not qualifying as capital goods, duplicate credit claims on the strength of the same invoice, and claims without supporting documents; the notice records a quantified demand and a partial deposit by the assessee.