2018 (12) TMI 713 - AT - Central Excise

Refund clam - payment of duty twice - CENVAT Credit - inputs/input services - coir mattress - benefit of N/N. 01/2011-CE dated 01.03.2011 - Section 11B of CEA - Penalty - Held that - Department have not alleged any suppression of facts with intent to evade payment of duty. Further, the first appellate authority has held that there was no such intent to warrant imposition of penalty. It is not in dispute that duty has been paid twice, once from the cenvat account and subsequently by cash through PLA. It is also not in dispute that the respondent assessee was eligible for refund. The only dispute was that whether the re-credit could be taken suo moto or a refund claim was required to be filed. Thus under the facts and circumstances of the case no penalty is imposable. The issue is covered by the decision of the Tribunal in the case of Commissioner of Central Excise, Surat-II vs. Vardhman Acrylics Ltd. 2013 (5) TMI 6 - CESTAT AHMEDABAD , where it was held that suo-moto admissible Cenvat credit taken, after getting a favourable decision from the first appellate authority, is correct. Appeal dismissed - decided against Revenue.

Summary

Issues:
Suo moto re-credit of duty amount without filing a refund claim under Section 11B.

Analysis:
The case involved a dispute regarding the respondent assessee's suo moto re-credit of duty amount without filing a refund claim under Section 11B. The appellant revenue contended that there is no provision allowing for such re-credit without proper officer sanction. However, the respondent argued that once duty is paid in cash, re-credit through the cenvat account is permissible. The Tribunal analyzed the facts and found no intent to evade duty payment or suppression of facts. It was acknowledged that duty had been paid twice, and the respondent was eligible for a refund. The central issue was whether re-credit could be taken suo moto or if a refund claim was necessary.

The Tribunal referenced a previous case, Commissioner of Central Excise vs. Vardhman Acrylics Ltd., where it was established that taking cenvat credit suo moto after a favorable appellate authority decision does not require a refund claim under Section 11B. The Tribunal differentiated between cases of refund and cenvat credit, emphasizing that the burden of unjust enrichment does not apply to the latter. It was clarified that once cenvat credit is reversed and later deemed admissible, no further approval is needed to claim it under the Cenvat Credit Rules.

Based on the analysis and legal precedents, the Tribunal concluded that the appellant's arguments were not applicable to the case at hand. It was held that the respondent's action of suo moto re-crediting the duty amount was valid, especially after obtaining a favorable decision from the appellate authority. Consequently, the impugned order was upheld, and the appeal by the revenue was rejected. The Tribunal found no grounds to interfere with the decision, and the operative portion of the order was pronounced in the open court.