2015 (2) TMI 831 - AT - Central Excise

Refund claim - Re-credited Cenvat account - Suo Motu credit - Unjust enrichment - National Calamity Contingent Duty (NCCD) in case of captive consumption - Notification No 67/95-CE - Held that - The Hon ble Gujarat High Court in the case of Shyam Textile Mills 2004 (6) TMI 590 - GUJARAT HIGH COURT on the identical situation quashed the show cause notice and allowed the petition filed by the petitioner. The relevant portion of the said decision is reproduced below Having heard the learned counsel for the parties, we are not in a position to appreciate as to how the respondents can find fault with the petitioner s availing of the amount lying to their credit in the deemed credit register after having succeeded before the Commissioner (Appeals). The respondents appear to be harbouring in misconception that there has to be some provision under which the petitioner can take benefit of the refund only after seeking permission of the authority whose order has been set aside by the Commissioner (appeals) . The Learned Authorised Representative attempted to distinguish the decision of the Hon ble Gujarat High Court in the case of Shree Shyam Textile Mills 2004 (6) TMI 590 - GUJARAT HIGH COURT in so far as the said case was related to deemed credit. In my view, there is no much difference as the deemed credit register and cenvat account, both are under Cenvat Credit Rules. - Decided against the revenue.

Summary

Issues involved:
1. Demand of National Calamity Contingent Duty (NCCD) on captively used Polyester Partially Oriented Filament Yarn (POY) and Polyester Fully Drawn Filament Yarn (FDY).
2. Disallowance of Cenvat credit and imposition of penalty for NCCD paid on captive consumption.
3. Eligibility of respondent to take suo moto re-credit in Cenvat account.
4. Applicability of unjust enrichment in captive consumption cases.

Analysis:

1. The case involved the demand of NCCD on captively used POY and FDY, leading to Show Cause Notices and subsequent appeals. The Adjudicating Authority confirmed the demand, which was set aside by the Commissioner (Appeals), allowing the appeal with consequential relief. The respondent re-credited the amount in their Cenvat account based on the order of the Commissioner (Appeals).

2. Another issue was the disallowance of Cenvat credit for NCCD paid on captive consumption, along with interest and penalty. The Adjudicating Authority disallowed the credit and imposed a penalty, which was set aside by the Commissioner (Appeals), leading to the Revenue filing an appeal against the impugned order.

3. The eligibility of the respondent to take suo moto re-credit in their Cenvat account was debated. The Revenue argued that a refund claim under Section 11B of the Central Excise Act should have been filed instead of taking suo moto credit. Reference was made to a Tribunal decision and the concept of unjust enrichment in captive consumption cases.

4. The applicability of unjust enrichment in captive consumption cases was discussed, with the Revenue emphasizing the need for following refund procedures. However, the respondent argued that the re-credit was based on the order of the Commissioner (Appeals) and cited relevant case laws supporting their position. The judgment highlighted the distinction between refund claims and taking admissible credit.

In the final decision, the Judge upheld the order passed by the Commissioner (Appeals), rejecting the appeal filed by the Revenue. The judgment considered previous decisions by the Tribunal and the Hon'ble Supreme Court, emphasizing the binding nature of the Division Bench decision on the identical issue. The analysis provided a detailed examination of each issue raised in the case, addressing legal arguments and precedents cited by both parties.