2014 (2) TMI 500 - AT - Central Excise

Suo moto credit taken due to excess Reversal of CENVAT Credit - Revenue contended that they have to file refund application u/s 11B - Held that - appellant has reversed the excess amount which was required to be reversed by them. The excess amount reversed by them is not a duty. Therefore, in the light of the judicial pronouncement where the Hon ble High Court of Karnataka 2006 (7) TMI 223 - HIGH COURT OF KARNATAKA AT BANGALORE held that any amount paid by mistake in excess, that amount cannot be termed as duty. Therefore, the provisions of section 11B of the Central Excise Act are not applicable. Further, in the case of Sopariwala Exports P. Ltd. (2013 (5) TMI 430 - CESTAT AHMEDABAD) wherein this Tribunal has held that duty paid twice is not duty. Therefore, assessee is entitled to take suomotu credit - appellant has taken the credit of the excess amount paid by them, which is not duty. Therefore, provisions of Section 11B are not applicable - Decided in favour of assessee.

Summary

Issues:
- Appeal against demand for suomotu credit reversal
- Interpretation of whether excess amount can be taken as suomotu credit

Analysis:
Issue 1: The appellant appealed against the demand for suomotu credit reversal, arguing that they had reversed an excess amount of Rs.9,96,585 during a specific period. The show-cause notice was issued for the demand of this excess amount, which was later adjudicated and converted into the impugned order. The appellant contended that they had taken suomotu credit of the excess amount they had reversed.

Issue 2: The main point of contention was whether the excess amount, which was not a duty, could be considered for suomotu credit by the appellant. The appellant's counsel cited previous judgments to support their argument, emphasizing that duty paid twice is not considered as duty. On the contrary, the respondent strongly opposed this argument, stating that excess duty payment should be claimed as a refund under Section 11B of the Act.

The Tribunal, after hearing both sides and considering the submissions, analyzed the situation. It was established that the excess amount paid by the appellant, which was later reversed, did not qualify as duty. Referring to a judicial pronouncement by the Hon'ble High Court of Karnataka and a previous Tribunal decision, the Tribunal concluded that the provisions of Section 11B were not applicable in this case. The Tribunal held that the appellant was entitled to take suomotu credit of the excess amount paid by them, which was not classified as duty. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary.