2018 (2) TMI 1316 - HC - Central Excise

Interpretation of statute - suo moto re-credit - Whether in the facts and circumstances of the case and law, the Hon ble Tribunal has committed substantial error of law in allowing the Appeal of the Respondent and in interpreting provision of Sec. 11 B of Central Excise Act 1944, by allowing to the Respondent to avail suomotu recredit of cenvat, by acknowledging it as only adjustment of books of entry? Held that - this was not the case of the assessee suomotu availing recredit but a case of mere correction of incorrectly made entries on the very same day - issue is completely factual - appeal dismissed.

Summary

Issues:
Interpretation of Sec. 11 B of Central Excise Act 1944 regarding recredit of cenvat.

Analysis:
The High Court of Gujarat heard an appeal filed by the Revenue challenging the judgment of CESTAT, which raised the question of whether the Tribunal had erred in allowing the Respondent to avail suomotu recredit of cenvat by interpreting Sec. 11 B of the Central Excise Act 1944. The Tribunal's observations highlighted that the Appellants had corrected entries on the same day after erroneously reversing CENVAT Credit, and it was not a case of suomotu recredit over time. The Tribunal found that the principle laid down by a Larger Bench in a different case was not applicable here, and the impugned order was set aside, allowing the appeal with consequential relief. The High Court noted that this case involved a factual issue of correcting entries on the same day rather than suomotu recredit.

In conclusion, the High Court dismissed the Tax Appeal, affirming the Tribunal's decision that the correction of entries on the same day did not constitute suomotu recredit of cenvat. The judgment emphasized the factual nature of the issue and the specific circumstances of the case, ultimately upholding the Tribunal's decision and rejecting the Revenue's challenge.