2008 (7) TMI 168 - AT - Central Excise

Appellants after noticing that they have debited an amount twice over in PLA, the appellant vide letter informed the Dy. Commissioner that they are taking credit in their RG 23A Part-II - SCN clears that what has been demanded from the appellant is not the refund wrongly claimed by him, but the amount of credit which was taken on letter which is not a duty paying document - lower authorities have held correctly that the appellant is ineligible to avail the credit in RG 23 Part-II on its own

Summary

Issues:
Appellant erroneously debited an amount twice over in PLA; Lower authorities disallowed credit availed by the appellant; Larger Bench concluded no provision for suo motu credit or refund without proper officer's sanction; Allegations in show cause notice; Appellant's submission regarding order traveling beyond show cause notice; Appellant's reliance on specific decisions; Appellant's contention for taking credit on a letter; Larger Bench's analysis on refund and duty payment; Proper officer's sanction for refund; Ineligibility of appellant to avail credit on its own.

Analysis:
The appeal involved the appellant erroneously debiting an amount twice over in the PLA during February 2004. The lower authorities disallowed the credit availed by the appellant, alleging a violation of Rule 7(1) of the Cenvat Credit Rules, 2002, and Rule 9(1) of the Cenvat Credit Rules, 2004. The issue was referred to the Larger Bench, which concluded that there are no provisions under the Central Excise Act and Rules allowing for suo motu credit or refund without sanction from the proper officer.

The appellant contended that the impugned order and the order-in-original went beyond the show cause notice, arguing that the lower authorities traveled beyond the allegations made in the notice. The appellant relied on specific decisions to support its case. However, the show cause notice clearly alleged that the appellant availed credit on a letter not considered a duty paying document, leading to the demand for the amount of credit taken improperly.

The Larger Bench's analysis emphasized the requirement for proper officer's sanction for refund and highlighted the ineligibility of the appellant to avail credit on its own. The appellant's submission for taking credit on a letter was deemed improper, as the letter did not qualify as a duty paying document. The impugned order was upheld, concluding that the appellant was ineligible to avail credit in RG 23 Part-II on its own.