2013 (5) TMI 430 - AT - Central Excise

Demand of duty Suo-moto credit taken by appellant - The facts are that the amount which has been paid in the cenvat credit and PLA is over and above the amounts which were debited by appellant for the consignments which were exported by availing the benefit under Rule 19 of Central Excise Rules, 2002. - Appellant submitted that the credit which was availed by the appellant was reversed in respect of the inputs which were used for the manufacturing of exported goods cleared under Bond. It is his submission that since the exports were done under LUT/Bond, the wrong debits made by the appellant in the Cenvat Credit Register, was required to be re-credited in the respective Cenvat Register and this was not a wrong duty as has been held by the lower authorities. Held that - the amount paid by mistake cannot be termed as duty in the case on hand - Following the decision of Motorola India Pvt. 2006 (7) TMI 223 - HIGH COURT OF KARNATAKA decided in favor of assessee - demand set aside.

Summary

Issues:
Confirmation of demand of an amount taken as suo-moto credit by the appellant.

Analysis:
1. The appellant took credit against duty for goods cleared for export under LUT without payment of duty. Subsequently, they debited the duty and filed a rebate claim, which was rejected.
2. The adjudicating authority confirmed all charges framed under the show cause notice.
3. The first appellate authority upheld the order in original after not agreeing with the contentions raised by the appellant.
4. The appellant argued that they were not required to pay duty as goods were exported under LUT, and the credit taken was for inputs used in manufacturing exported goods cleared under Bond.
5. The Revenue contended that the suo-moto credit taken by the appellant was not acceptable based on a decision by the Larger Bench of the Tribunal.
6. The appellant referred to contradictory decisions and argued that the decision of the Larger Bench was incorrect.
7. The judge considered the submissions and perused the record to determine the issue involved.
8. The main issue was the confirmation of demand for the amount taken as suo-moto credit by the appellant, believing they had paid the duty twice over.
9. It was undisputed that the appellant was not required to pay duty on clearances made for export under LUT.
10. The judge reviewed the decision of the Larger Bench in BDH Industries Limited and found it incorrect based on a similar case involving Motorola India Pvt. Limited.
11. The judge cited the case of Motorola India Pvt. Limited where a refund was allowed for an excess amount paid due to a clerical error, which was upheld by the Hon'ble High Court of Karnataka.
12. As no contrary judgment was presented, the judge held that the decision in Motorola India Pvt. Limited would prevail over the Larger Bench decision in BDH Industries Limited.
13. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment highlights the issues involved, arguments presented by both parties, relevant legal precedents, and the judge's decision based on the interpretation of the law and previous judgments.