New Delhi, 16.12.2025 : The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside a central excise demand of ₹96.02 lakh raised against Bridgestone India Private Limited, holding that the department wrongly invoked the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944.
The Tribunal held that the mere fact that an issue surfaced during a departmental audit does not justify invoking the extended limitation period, especially when the assessee had disclosed the availment of CENVAT credit in its statutory ER-1 returns.
The Bench, comprising Justice Dilip Gupta, President, and P.V. Subba Rao, Member (Technical), was hearing an appeal filed by Bridgestone India challenging an order of the Commissioner (Appeals) that had upheld the demand of excise duty along with interest and penalty for the period from April 2017 to June 2017.
The demand arose from an audit objection alleging that Bridgestone had received excess CENVAT credit amounting to ₹96,02,623 through an Input Service Distributor, in violation of Rule 7 of the CENVAT Credit Rules, 2004. A show cause notice was issued on January 17, 2022, invoking the five-year extended limitation period on the ground that the alleged irregularity came to light only during audit and that the assessee had suppressed material facts with intent to evade duty.
Accepting this view, the adjudicating authority held that the excess credit would have gone unnoticed but for the audit, a finding later affirmed by the Commissioner (Appeals). The appellate authority reasoned that since ER-1 returns reflected only a summary of CENVAT credit and not detailed break-ups, suppression could be inferred.
Before the Tribunal, Bridgestone argued that it had made all disclosures required under law in its ER-1 returns and that the return format itself does not mandate disclosure of detailed particulars of CENVAT credit. It contended that non-furnishing of details not prescribed in the return could not be treated as suppression.
Agreeing with the assessee, the CESTAT noted that it was undisputed that Bridgestone had disclosed the availment of CENVAT credit in its ER-1 returns. The Bench rejected the view that suppression could be inferred merely because the returns contained only summary information, observing that an assessee is obligated to disclose only what the statutory return specifically requires. If the department had doubts, it was always open to it to scrutinise the returns and seek further clarification.
The Tribunal reiterated that invocation of the extended period under Section 11A(4) requires deliberate suppression coupled with intent to evade duty. Relying on settled law, including the Supreme Court’s ruling in Pushpam Pharmaceutical Co. v. Commissioner of Central Excise, the Bench held that suppression cannot be presumed from a mere omission and must involve a conscious act of withholding information.
It also found fault with the show cause notice, noting that it contained only bald allegations without specifying which facts were allegedly concealed or which columns of the return were wrongly filled. Such vague allegations, the Tribunal held, do not meet the statutory threshold.
Significantly, the Bench emphasised that discovery of facts during audit, by itself, is not sufficient to invoke the extended limitation period. Since the show cause notice was issued well beyond the normal limitation period of two years and the conditions for invoking the extended period were not met, the entire demand was held to be time-barred.
Accordingly, the CESTAT set aside the order of the Commissioner (Appeals) and allowed Bridgestone’s appeal without going into the merits of the demand.
Case Details:
Cause Title: Bridgestone India Pvt. Ltd. v. Commissioner of Central Excise & CGST
Case No.: Excise Appeal No. 51840 of 2024
Coram: Justice Dilip Gupta (President) and P.V. Subba Rao (Member–Technical)
