Rule 9(1)(b) Not Applicable as Suppression Alleged does not have Supporting Evidence: CESTAT [Read Order]
CESTAT rules that a lack of documentary evidence on part of the department makes the confirmed demand unsustainable. The limitation period was also exceeded in issuing the show cause notice.
![Rule 9(1)(b) Not Applicable as Suppression Alleged does not have Supporting Evidence: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2026/02/23/2126814-suppression-alleged-does-not-supporting-evidence-cestat-taxscan.webp "Rule 9(1)(b) Not Applicable as Suppression Alleged does not have Supporting Evidence: CESTAT [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, held that Rule (1)(b) of Cenvat Credit Rules, 2004 is not applicable when the alleged suppression of facts does not have supporting evidence. The facts show that the appellant undertook Cenvat Credit of INR 23,36,700/- during April 2016 to March 2017. The credits were taken based on supplementary...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, held that Rule (1)(b) of Cenvat Credit Rules, 2004 is not applicable when the alleged suppression of facts does not have supporting evidence.
The facts show that the appellant undertook Cenvat Credit of INR 23,36,700/- during April 2016 to March 2017. The credits were taken based on supplementary invoices issued by Mahanadi Coalfields Ltd. (MCL).
A show cause notice was issued against the appellant on the ground the MCL issued supplementary invoice after detection of suppression towards non-inclusion of Cess in valuation. The lower authorities confirmed the demand and therefore the appellant is before the CESTAT.
The counsel for the appellant submitted that the goods received by the appellant were not in dispute.
The issue was whether royalty on mining of coal was required to be included in valuation or not and this, the counsel submitted, has been a matter of dispute before the Supreme Court where it was held that royalty is to be included in the value and the MCL paid the excise duty. It was submitted that the exclusion provision of Rule 9(1)(b) cannot be attracted.
It was also argued that the show cause notice had exceeded the time limitation and the Revenue department has not provided any evidence to prove that the appellant had suppressed any factual details while taking the credit. The books of account and ER-1 Returns reflect the credit taken.
The counsel for the Revenue submitted that only after the investigation had been taken up, the appellant paid the exciseduty and raised supplementary invoices.
The tribunal via R. Muralidhar (Judicial Member) observed that the department had only provided a bland statement of suppression and supplied no documentary evidence. CESTAT held that the Rule would not be applicable and the confirmed demand is not sustainable. The time bar was also taken into account and the appeal was allowed accordingly.
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