2026-VIL-651-MAD-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Cenvat Credit Eligibility and Extended Period of Limitation - Cenvat credit on service tax paid towards annual maintenance charges for software services procured from a foreign vendor - Recovery of Cenvat credit taken, alleging that the service tax was not leviable for services rendered prior to the prescribed date, and that the appellant had suppressed contractual obligations with the vendor - Whether the extended period of limitation under section 11A of the Central Excise Act can be invoked when there is no intention to evade duty – HELD - Where a taxpayer takes credit of erroneously paid service tax by suo motu availing credit instead of following the prescribed procedure of filing a refund claim, and furthermore suppresses material facts like contractual obligations from the Department, such conduct amounts to suppression of facts. The suppression of contractual obligation entered into between the vendor and the appellant (formerly known as Alstom) was not disclosed to the Department, and the service tax was paid belatedly followed by suo motu credit availed instead of claiming refund - Taking the entire transaction as a whole, suppression and fraudulent conduct get established, thereby attracting the extended period of limitation of five years under section 11A. The remedy available to a taxpayer for erroneously paid duty is to file a refund claim under section 11B, and not to suo motu take credit. Since the inspection and verification commenced prior to the notice, and the extended period was available due to suppression of facts, the notice issued during the extended period is valid and the penalty is also justified – The Tribunal Order is upheld and the appeal is dismissed
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