2017 (6) TMI 210 - AT - Central Excise

Suo moto refund - Interest - whether the appellant could suo-moto take the credit of ₹ 4,52,673/- on 31.1.2012 reversed earlier on 4.11.2010 towards payment of interest? - Held that - he issue has been settled by the Larger Bench of this Tribunal in BDH Industries Ltd s case 2008 (7) TMI 78 - CESTAT MUMBAI , where it was held that there is no provision under CEA/CER allowing suo moto taking of credit/refund without sanction by the proper officer - appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against OIA No 91/2013 passed by the Commissioner (Appeals), Central Excise, Ahmedabad.
- Determination of whether the appellant could suo-moto take credit of a specific amount reversed earlier towards payment of interest.

Analysis:
The case involved an appeal against OIA No 91/2013 passed by the Commissioner (Appeals), Central Excise, Ahmedabad. The appellant, a manufacturer of excisable goods, availed the benefit of a notification without payment of duty to M/s Bhabha Atomic Research Centre. Due to not maintaining separate accounts for common inputs, they were required to pay 10% of the value of exempted final products. The appellant reversed Cenvat Credit and paid interest, later debiting the Cenvat Credit account and paying through GAR-7 Challan. A show cause notice was issued for recovery of the suo-moto credit and penalty proposal. The demand was confirmed, and a penalty imposed, leading to the current appeal.

The main issue for determination was whether the appellant could suo-moto take credit of the amount reversed earlier towards interest payment. The appellant argued that the amount paid through Cenvat Credit should be treated as a deposit, allowing them to avail suo-moto credit. They referenced a decision of the Tribunal in support. On the contrary, the Revenue argued that the appellant's self-credit after a significant time lapse was not authorized under the Act and Rules. They cited judgments supporting their stance.

The Tribunal, after considering the arguments, highlighted that there is no provision allowing suo-moto taking of credit or refund without proper officer sanction under the Central Excise Act and Rules. Refunds must pass through Section 11B and prove non-passing of duty incidence to others. The Tribunal referred to relevant case law emphasizing the doctrine of unjust enrichment. Ultimately, the Tribunal upheld the impugned order of the Ld Commissioner (Appeals), dismissing the appeal for lack of merit.

In conclusion, the Tribunal's decision emphasized the procedural requirements for refunds and credits under the Central Excise Act and Rules, highlighting the need for proper officer sanction and adherence to legal provisions. The appeal was dismissed, affirming the penalty and demand imposed on the appellant.