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2006 (3) TMI 47 - AT - Central ExciseCentral Excise Cenvat/Modvat Assessee could not took suo motu credit on the basis of Annexure-2 challan on return of finished goods in their factory and proper procedure to be followed for filing a refund claim
Issues: Modvat credit on duty paid for goods sent for job work under old Cenvat Rules, validity of Annexure-2 challan for taking credit, permissibility of suo motu credit, proper procedure for filing refund claim under Section 11AB of Central Excise Act, setting aside of demand amount and penalty imposition.
In this case, the main issue was whether the respondents could take Modvat credit on duty paid for goods sent for job work under the old Cenvat Rules. The respondents mistakenly paid the duty and took credit based on Annexure-2 challan when there was no requirement to debit the duty from RG 23A for goods sent for job work during the relevant period. The learned SDR argued that credit can only be taken based on invoices from the manufacturer or first stage dealer, or the Bill of Entry, and that Annexure-2 challan is not a valid document for claiming credit. Reference was made to a Tribunal decision in a similar case, emphasizing that suo motu credit is impermissible, and the prescribed procedure under Section 11AB of the Central Excise Act must be followed for filing a proper refund claim. Despite the notice, no one appeared for the respondents. The Tribunal considered the submissions of the learned SDR and concluded that the respondents were not entitled to take suo motu credit, highlighting the necessity of following the proper procedure for filing a refund claim as established in previous Tribunal decisions. Consequently, the Commissioner (Appeals) was found to be incorrect in setting aside the demand amount. The Tribunal upheld the penalty imposed by the Commissioner (Appeals) while setting aside the order regarding the demand amount. In the final disposition, the appeal was resolved with the demand amount being reinstated, and the penalty imposed was upheld. The judgment emphasized the importance of adhering to the prescribed procedures for claiming credit and filing refund claims under the Central Excise Act, as established in relevant Tribunal decisions.
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