2011 (2) TMI 790 - AT - Central Excise

Suo moto re-credit after reversal of cenvat credit - Though the appellant plead that the details of suo moto recredit on 24/5/05 had been reflected in the ER-1 return for the month of May 2005 and on this ground they are pleading the show cause notice is time barred, find that this plea was neither taken before the original Adjudicating Authority nor the same was made before the Commissioner (Appeals) - The question of limitation is a mixed question of fact and law and if this plea has not been taken before the original Adjudicating Authority and Commissioner (Appeals), the same cannot be taken in the course of appeal before the Tribunal - Also find that Larger Bench of the Tribunal in the case of BDH Industries Ltd. vs. CCE (Appeals), 2008 -TMI - 30889 - CESTAT MUMBAI has held that suo moto refund of excess or twice paid duty cannot be taken and all types of refund claims to have been filed under Section 11B - In this case when the appellant after debiting the Cenvat credit had opted for immunity from further proceedings for imposition of penalty, under the provisions of Section 11A (2B) and having been granted such immunity, they could not again take suo moto credit - The appeal is dismissed accordingly.

Summary

Issues involved:
Claim of Cenvat credit on short-received material, voluntary debit, recredit without intimation, time bar on show cause notice, penalty imposition, plea of limitation, immunity under Section 11A (2B), refund claim under Section 11B, details in ER-1 return.

Detailed Analysis:

1. Claim of Cenvat credit on short-received material:
The appellant, a manufacturer, availed Cenvat credit for inputs used in manufacturing final products. During an inspection, it was discovered that invoices for which credit was taken had endorsements indicating short receipt of material. The appellant voluntarily debited the Cenvat credit but later recredited the amount without proper intimation to the department.

2. Voluntary debit and recredit without intimation:
The appellant initially admitted the mistake of taking Cenvat credit on short-received material and sought immunity under Section 11A (2B) of the Central Excise Act. However, they later recredited the amount without proper intimation to the department, leading to a show cause notice for recovery of the recredited amount along with interest and penalty.

3. Time bar on show cause notice and penalty imposition:
The appellant argued that the show cause notice issued after one year from the relevant date was time-barred. They contended that there was no malafide intent or suppression of information, and therefore, the penalty imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act was unjustified.

4. Plea of limitation and immunity under Section 11A (2B):
The department argued that the appellant's plea of limitation and immunity under Section 11A (2B) should not be considered as these were not raised before the Adjudicating Authority or the Commissioner (Appeals). The department maintained that the appellant had voluntarily debited the Cenvat credit and sought immunity, making the recredit unauthorized.

5. Refund claim under Section 11B and details in ER-1 return:
The Tribunal highlighted that if the appellant believed there was no shortage of inputs and the credit reversal was unnecessary, they should have filed a refund claim under Section 11B instead of recrediting the amount. The details of the recredit in the ER-1 return were disputed, as there was no specific provision for such details in the return format.

In conclusion, the Tribunal held that the appellant's recredit of Cenvat credit after seeking immunity was unjustified. The plea of time bar and the details in the ER-1 return were not considered as they were not raised earlier in the proceedings. The appeal was dismissed based on the principles outlined in the case law and the provisions of the Central Excise Act.