2026-VIL-1056-GUJ-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Invocation of extended period of limitation under Section 11A - Appellant imported goods classified as inputs but directly sold in open market without being received in factory premises - Appellant claimed CENVAT credit on 4% Additional Customs Duty by making false entries in RG 23A register showing goods received and issued for manufacturing though goods were directly dispatched to buyers from port of import - Department issued Show Cause Notice proposing disallowance of CENVAT credit and invoked extended period of five years under Section 11A - Whether appellant made wilful misstatement and suppression of facts sufficient to invoke extended period of limitation under Section 11A of Central Excise Act – HELD - Clear misdeclaration exists as appellant showed imported goods as inputs in RG 23A register and issued chits and slips indicating use in manufacture when goods never reached factory premises and were directly sold to buyers from port of import. This constitutes wilful misstatement and suppression of facts sufficient to invoke extended period under Section 11A as appellant knew that goods were not eligible for CENVAT credit under Rules 3 and 4 of CENVAT Credit Rules 2004 - Plea of bona-fide belief based on Budget Speech is not tenable as the statutory requirements for claiming CENVAT credit were unambiguously prescribed in Rules 3 and 4 of CENVAT Credit Rules 2004 - The fact that Department did not query false entries during earlier audits does not absolve appellant from making misdeclaration as responsibility lay with appellant not to claim credit when not entitled. Appellant continued to claim credit knowingly till the same was found during audit conducted in 2009, when appellant immediately reversed credit, demonstrating knowledge of wrongfulness of the claim - Notification No. 102/2007 providing for refund of 4% SAD is a separate and distinct process from availing CENVAT credit and cannot be conflated to constitute a revenue-neutral exercise. The elaborate manipulation evidenced by false entries in registers, issue slips and chit numbers to indicate manufacturing use when goods were directly diverted to buyers clearly establishes wilful misstatement and fraud within the scope of Section 11A - The extended period of limitation under Section 11A of CEA, 1944 was rightly invoked - The demand confirmed is upheld and the appeal is dismissed
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