2006 (3) TMI 431 - AT - Central Excise

Summary

Issues:
Re-credit of wrongly paid amount under Rule 57AD on sugar mill rollers repaired and cleared.

Analysis:
The short point in this appeal revolves around the respondents seeking re-credit of the erroneously paid 8% amount under Rule 57AD for sugar mill rollers repaired and cleared by them. The learned S.D.R. contends that the Commissioner (Appeals) erred in allowing such re-credit as there is no provision for re-credit in Central Excise law. Citing the Supreme Court decision in Mafatlal Industries Ltd., it was emphasized that all refund claims must be filed under Section 11B and not through re-credit. The Tribunal's decisions in cases like Prerna Cables Pvt. Ltd. and Albert David Ltd. were cited to support the argument that refund claims should be filed instead of taking re-credit. Additionally, the Tribunal's decision in the case of Century Rayon highlighted that if the credit was not allowed by the Superintendent, the appellants could not have taken it on their own.

The advocate for the respondents referred to the decision in Priya Blue Industries Ltd. v. Commissioner of Central Excise & Customs, Rajkot, where it was held that the payment under Rule 57CC is not akin to duty payment through Modvat credit, thus Modvat rules and Section 11B do not apply. Another case, Suparna Chemicals Ltd. v. C.C.E, Mumbai, was cited to support the stance that if credit is admissible, the assessee can take the credit on their own if it was incorrectly reversed by them on export clearance.

Upon considering the arguments from both sides, the judge found that the Supreme Court and Tribunal decisions cited were not directly relevant to the current case. The judge distinguished the present circumstances from the cases of Preena Cables and Albert David, as the facts differed. The judge also noted that the case of Century Rayon involved a different scenario where the credit was not allowed by the Superintendent, preventing the appellants from taking it on their own. The judge concluded that the facts of the current case align with the CESTAT decision in Priya Blue Industries, which established that the reversal of credit under Rule 57CC does not constitute duty payment through Modvat credit, making the provisions of Modvat and Section 11B inapplicable. Therefore, in such cases, there is no irregularity in the assessee taking the credit on their own. Consequently, the Revenue appeal was dismissed.