2008 (6) TMI 490 - AT - Central Excise

Summary

Issues:
1. Utilization of Additional Duty of Excise (Goods of Special Importance) credit for payment of Basic Excise Duty and Special Excise Duty.
2. Restoration of credit in the Cenvat account after payment through PLA.
3. Validity of utilizing TR-6 challan for Cenvat credit.
4. Interpretation of retrospective amendments in the Finance Acts.
5. Adjudication on the legality of restoration of credit by the Commissioner.
6. Conflict in Tribunal decisions regarding restoration of credit.

Analysis:
1. The case involved the utilization of Additional Duty of Excise (AED) credit for Basic Excise Duty (BED) and Special Excise Duty (SED) payment. The respondent utilized the AED credit accrued before 1-4-2000 for BED and SED payment, which was later deemed irregular due to retrospective amendments in the Finance Acts.

2. After paying the amount in installments, the respondent restored the credit in their AED Cenvat account. The department objected, stating that the credit restoration was illegal as it was based on TR-6 challan payments, which are not valid for Cenvat credit. The Commissioner initially allowed the restoration, leading to the revenue's appeal.

3. The department argued that the respondent's utilization of AED credit through TR-6 challan was unauthorized. They contended that the respondent should have filed a refund claim instead of restoring the credit suo motu, citing legal precedents emphasizing strict interpretation of tax statutes and the need for following prescribed procedures for credit restoration.

4. The respondent justified the credit restoration, stating that the payment was made as per prevailing provisions and only retrospectively deemed irregular. They referenced tribunal decisions supporting credit restoration after payment through PLA, highlighting that it resulted in revenue-neutral activity. The conflicting tribunal decisions necessitated a reference to the Larger Bench for resolution.

5. The Tribunal found the core issue to be whether the respondent could restore the wrongly utilized AED credit after payment through PLA. Due to conflicting tribunal decisions, the matter was referred to the Larger Bench to determine if the assessee can suo motu restore credit or must file a refund claim in such cases, seeking resolution on the restoration process.

This detailed analysis covers the key legal aspects and arguments presented in the judgment, addressing the complexities of credit utilization, restoration, and conflicting interpretations of tax laws by different tribunals.