2013 (5) TMI 6 - AT - Central Excise

Admissibility Suo-moto credit Department submitted that the same could have been taken by following the refund procedure under Section 11B of the Central Excise Act, 1944. Held that Following the judgement of Shyam Textile Mills & ANR vs. UOI & Ors 2004 (6) TMI 590 , it is held that suo-moto admissible Cenvat credit taken, after getting a favourable decision from the first appellate authority, is correct. Accordingly, the Order in appeal is upheld and appeal filed by the Revenue is rejected.

Summary

Issues:
Whether an assessee can take suo-moto cenvat credit after receiving a favorable decision from the first appellate authority.

Analysis:
The appeal was filed by the Revenue against an Order in Appeal where a suo-moto credit was taken by the respondent. The Revenue contended that certain judgments were not considered by the Commissioner (Appeals) regarding the issue of an assessee taking suo-moto credit. The appellant department emphasized that taking suo-moto credit is impermissible and should be done through the refund procedure under Section 11B of the Central Excise Act, 1944. The key issue was whether the respondent could take cenvat credit suo-moto after a favorable decision by the Commissioner (Appeals).

The Hon'ble Supreme Court's judgment in Mafatlal Industries Limited case regarding unjust enrichment in refund cases under Section 11B of the Central Excise Act was discussed. However, it was clarified that this judgment was not directly applicable to the case at hand, where the issue was about taking admissible cenvat credit after a favorable order, not about refund claims.

In the case of Oudh Sugar Mills Limited vs. CCE Allahabad, it was noted that the facts were substantially different from the present case where the credit was reversed under protest, and an appeal was filed before taking the credit. Similarly, the case of Vighnahar SSK Limited vs. CCE Pune was distinguished as the credit was reversed before the show cause notice, and once the credit was reversed and then taken after a favorable decision, it was considered admissible.

The judgment of Shyam Textile Mills vs. UOI highlighted that an assessee can avail of the credit after succeeding before the Commissioner (Appeals) without seeking permission. CESTAT Bench Bangalore also supported the concept that suo-moto credit can be taken during the pendency of a decision. The Tribunal held that taking suo-moto admissible cenvat credit after obtaining a favorable decision from the first appellate authority is permissible. Consequently, the Order in Appeal was upheld, and the Revenue's appeal was rejected.