Relief to Maruti Suzuki : CESTAT Quashes Excise Duty Demand on Manufacture of Motor Vehicles, Spares and Components on ground of Limitation [Read Order]

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Maruthi Suzuki India by quashing the excise duty demand on the manufacture of motor vehicles, spares, and components on the ground of limitation. 

Maruti Suzuki India Ltd, the appellant assessee is engaged in the manufacture of motor vehicles, spares, components, etc., and is availing CENVAT credit on inputs, capital goods, and services, the assessee sends some of the vehicles to their associated companies situated outside India for testing, research and development purposes; such vehicles exported did not materialize in any export realization. 

The assessee appealed against the order passed by the adjudicating authority for confirming the demand of CENVAT credit of Rs.1,90,20,198/- along with interest and for the imposition of penalty against the assessee. 

Krati Singh, the counsel for the assessee contended that the department itself had been taking a contrary view regarding the admissibility of credit in the assessee’s case and therefore, the extended period cannot be invoked. 

Narinder Singh, the counsel for the department contended that the prototypes exported by the appellants are not classifiable under the First or Second Schedule to the Central Excise Act, 1985 and since the prototypes are not marketable, they do not qualify to be called goods; if any goods do not satisfy the definition under Section 2(d) of the Central Excise Act, 1944, the same does not qualify to be “final products” for Rule 2(h) of the CENVAT Credit Rules, 2004. 

The Bench observed that there was no positive act of suppression etc. on their behalf to invite the extended period and they are regularly filing the Returns and were exporting the prototypes or motor vehicles under bond and for these reasons, suppression, etc. with intent to evade payment of duty cannot be alleged. 

The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the demand for excise duty while allowing the appeal filed by the assessee. 

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