CESTAT Kolkata: Extended Limitation Not Invokable When Facts Disclosed in Returns; CENVAT Credit Cannot Be Denied Retrospectively

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the extended period of limitation cannot be invoked where the assessee has regularly disclosed material facts in statutory returns, and that procedural conditions introduced later cannot be applied retrospectively to deny CENVAT credit.

The Division Bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) delivered the ruling while deciding cross appeals filed by Jindal Stainless Limited and the Revenue against an Order-in-Original passed by the Principal Commissioner, CGST & CX, Bhubaneswar.

Jindal Stainless Limited, engaged in manufacturing ferro alloys and stainless steel products, had entered into a job work arrangement with M/s Stemcor India Pvt. Ltd. for conversion of imported coal into coke. While Stemcor retained ownership of both input and output, the assessee manufactured coke and cleared it on payment of duty, and also availed CENVAT credit on the strength of invoices issued by Stemcor.

A departmental audit for the period 2012–13 to 2014–15 led to a show cause notice invoking the extended period of limitation. The notice proposed a duty demand of ₹3.24 crore on alleged clandestine removal of coke captively consumed and also sought to deny CENVAT credit exceeding ₹20 crore.

On the issue of clandestine removal, the Tribunal noted that the demand related to January 2013 to January 2014, whereas the show cause notice was issued much later by invoking the extended limitation period. It found that the assessee had consistently disclosed the availment of exemption under Notification No. 67/1995-CE in its ER-1 returns. As recorded in the order (page 8), these returns clearly reflected the exemption claim, establishing that the Revenue was already aware of the relevant facts.

In these circumstances, the Tribunal held that there was no suppression or misstatement to justify invoking the extended limitation period. Consequently, the entire demand of ₹3.24 crore, along with penalties, was set aside as time-barred.

With respect to the denial of CENVAT credit, the Revenue argued that Notification No. 8/2014-Central Excise (NT) required suppliers to obtain separate registration as importers for issuing cenvatable invoices. The Tribunal rejected this contention, noting that the notification came into effect from 1 April 2014, whereas the disputed period was prior to that date.

The Bench held that the notification operates prospectively and cannot be applied retrospectively to deny credit validly availed under the law prevailing at the relevant time. It further affirmed that invoices issued by an importer constituted valid documents for availing credit under the CENVAT Credit Rules.

Accordingly, the Tribunal upheld the admissibility of CENVAT credit and dismissed the Revenue’s appeal, while allowing the assessee’s appeal.

Cause Title: Jindal Stainless Ltd. v. Principal Commissioner, CGST & CX, Bhubaneswar
Case Nos.: Excise Appeal Nos. 75103 & 75223 of 2020
Decision Date: 09 March 2026