2012 (11) TMI 521 - AT - Central Excise

Cenvat Credit - Questioned amount is regarding availment of Cenvat credit of Rs. 74,918/- in respect of inputs purchased by the appellant in the month of June, 1999 and for confirmation of demand of duty of Rs. 45,388/- and 16,153/-, which was paid by utilising the said unavailable Modvat credit, such credit was availed by the appellant, under intimation to the Revenue. Held that - Provisions of unjust enrichment or limitation do not apply to such refund of pre-deposit. As such there could be no objection by the Revenue for the refund of such pre-deposited amount - set aside the impugned order and appeal allowed with consequential relief to the appellant - in favour of appellant.

Summary

Issues:
1. Availment of credit for inputs purchased in June 1999.
2. Dispute regarding re-credit of debited amount.
3. Applicability of Section 35F on re-credit.
4. Interpretation of judicial decisions on re-credit post successful appeal.

Analysis:
1. The appellant, engaged in manufacturing iron and steel articles, faced a dispute over availing credit for inputs purchased in June 1999. The Tribunal's Final Order on 28.11.05 favored the appellant, entitling them to credit of Rs. 74,918/-, which was debited initially. The appellant re-credited the amount in their account on 30.12.06 after confirmation of demand by lower authorities.

2. The central issue in the appeal pertains to the re-credit of the debited amount. The lower authorities contended that the appellant took the credit suo-moto without awaiting approval from the Asstt. Commissioner, relying on a previous decision. Consequently, they directed the appellant to deposit the duty amounts paid using the credit and imposed a penalty. This led to the present appeal challenging the lower authorities' decision.

3. The crux of the matter revolves around whether the appellant could take suo-moto credit post the successful appeal, as per Section 35F. The appellant had informed the jurisdictional Asstt. Commissioner before re-crediting the amount. The Tribunal analyzed the applicability of Section 35F and the necessity of Asstt. Commissioner's approval for re-credit.

4. Judicial precedents played a crucial role in determining the outcome. The Tribunal differentiated the present case from the BDH Industries Ltd. decision and cited cases like Ultra Tech Cement Ltd. and Shyam Textile Mills, emphasizing the appellant's right to re-credit upon favorable appeal outcomes. It highlighted instances where appellants were allowed to take suo-moto credit upon receiving a favorable decision, under intimation to the Revenue, without awaiting Asstt. Commissioner's decision. The Tribunal, considering the facts and legal principles, set aside the lower authorities' decision and allowed the appeal, granting consequential relief to the appellant.