2017 (6) TMI 630 - AT - Central Excise

Refund of CENVAT credit and interest paid due to wrong direction of the audit authorities - time limitation - Held that - The Original Authority after verification of the records, has come to the conclusion that the appellant had not claimed depreciation and therefore the appellant was not required to reverse the CENVAT credit and to pay the interest thereon - the appellant is entitled to CENVAT credit which the appellant reversed at the instance of the Audit party wrongly along with interest paid by him - appellant allowed to take recredit of the CENVAT credit reversed along with interest - decided in favor of assessee.

Summary

Issues:
Appeal against rejection on account of time bar.

Analysis:
The appeal was directed against an order rejecting it due to being time-barred. The appellant, engaged in manufacturing copper rods, had availed Cenvat credit under Cenvat Credit Rules 2004. During an audit, it was found that the appellant had wrongly availed Cenvat credit and depreciation. The appellant reversed the Cenvat credit and paid interest based on the audit team's direction. Subsequently, the appellant sought a refund, which was rejected as time-barred by the Assistant Commissioner and the Commissioner (Appeals). The appellant contended that the reversal and payment were done based on incorrect audit directions. The appellant argued that the payments were in the nature of a deposit pending adjudication, as no show-cause notice was issued for the demand of duty. The appellant cited various legal precedents to support their case.

Decision:
After hearing both parties and examining the records, the Tribunal found that the Cenvat credit was reversed and interest paid at the audit party's instance. The Original Authority verified that the appellant had not claimed depreciation, making the reversal unnecessary. The appellant agreed not to press for a refund if allowed to take recredit of the reversed Cenvat credit and interest. The Tribunal, without delving into the case's merits, allowed the appellant to recredit the Cenvat credit along with the interest paid. Consequently, the order rejecting the refund claim was modified, and the appellant was granted relief. The appeal was disposed of in favor of the appellant.