The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal has recently allowed Bharat Aluminium Company Limited (BALCO) to claim CENVAT credit of ₹6.51 crore on supplementary invoices issued by South Eastern Coalfields Limited (SECL).

The tribunal held that the invoices were eligible for credit because SECL's earlier short-payment of excise duty was not due to fraud, collusion, wilful misstatement or suppression of facts.

The Bench comprised Officiating President Dr. Rachna Gupta and Technical Member P. V. Subba Rao. BALCO had challenged an order passed by the Principal Commissioner, which disallowed credit of ₹6,51,22,158 taken on supplementary invoices issued by SECL.

SECL had supplied coal to BALCO. While paying central excise duty, it excluded amounts such as royalty, entry tax and forest transit fees from the assessable value of the coal. After the matter was disputed, SECL paid the differential duty and issued supplementary invoices to BALCO.

Rule 9(1)(b) of the CENVAT Credit Rules permits a manufacturer to claim credit on a supplementary invoice when additional excise duty has been paid. The rule, however, bars credit where the additional duty became payable because the original short-payment resulted from fraud, collusion, wilful misstatement or suppression of facts, among other specified violations intended to evade duty.

The Principal Commissioner had found that SECL's short-payment involved suppression of facts. BALCO's credit was therefore treated as inadmissible, with recovery of ₹6,51,22,158 along with interest and an equal penalty.

BALCO relied on an earlier tribunal decision in appeals filed by SECL itself. In that case, the tribunal held that SECL's short-payment was not due to fraud, collusion, wilful misstatement, or suppression of facts.

It consequently set aside the demand for the extended period of limitation and the penalty under Section 11AC of the Central Excise Act.

Relying on that finding, the tribunal held that SECL's supplementary invoices were eligible documents for BALCO to claim CENVAT credit under Rule 9(1)(b). It allowed BALCO's appeal, set aside the impugned order and granted consequential relief.

For Appellant: Advocate Rajeev Agarwal

For Revenue: Rajat Malhotra, Authorised Representative

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Case Title :  Bharat Aluminium Company Limited v. Commissioner of Central Excise and Service Tax, RaipurCase Number :  Excise Appeal No. 51058 of 2018CITATION :  2026 LLBiz CESTAT(DEL) 558
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