2024 (6) TMI 579 - AT - Central Excise

Suo moto credit in the CENVAT Credit account - benefit given under N/N. 01/2011-C.E. - HELD THAT - It is a fact on record that the respondent had cleared goods to the Indian Railways as well as private companies and during the period from April 2012 to June 2012, the respondent utilized the CENVAT Credit for payment of duty at the rate of 6% for the clearances to Indian Railways as well as private companies. Later on, upon realization that the respondent is entitled to the benefit of Notification No. 01/2011-C.E. dated 01.03.2011 wherein duty is payable at the rate of 2% in cash, the respondent paid the same along with interest. In these circumstances, the duty paid during the period from April 2012 to June 2012 for clearances to the Indian Railways by utilizing CENVAT Credit is eligible as CENVAT Credit for the respondent. The case of the Revenue is that the respondent is not entitled to avail CENVAT Credit suo moto, but are required to file refund claims. The said issue has been settled by this Tribunal in the case of M/S. CIMMCO LIMITED VERSUS COMMISSIONER CGST CENTRAL EXCISE ALWAR (VICE-VERSA) 2019 (7) TMI 1606 - CESTAT NEW DELHI wherein it was observed ' The fact that the duty which was in the first instance was paid from accumulated Cenvat credit have later been paid from cash by debiting through PLA account. It is only adjusted as the duty on the same goods cannot be paid twice and as the required amount of duty on the wagons cleared was on payment from PLA.. They were certainly entitled for taking the cenvat credit which was debited in the first instance.' The respondent has correctly taken suo moto credit of the duty paid by utilizing CENVAT Credit account, which has been ultimately paid, in cash, along with interest - there are no infirmity in the impugned order and hence, the same is upheld - appeal of Revenue dismissed.

Summary

Issues involved: Appeal against impugned order regarding taking suo moto credit u/s Notification No. 01/2011-C.E. dated 01.03.2011.

The Appellate Tribunal CESTAT Kolkata heard an appeal filed by the Revenue against the impugned order. The case involved the respondent, a manufacturer of railway wagons, who cleared goods to the Indian Railways during April 2012 to June 2012 at a duty rate of 6%. Subsequently, realizing their entitlement u/s Notification No. 01/2011-C.E., the respondent paid duty at 2% in cash for the same period and took suo moto credit of the duty paid through CENVAT Credit account. The Revenue contended that the respondent should not have taken suo moto credit, initiating proceedings against them. The adjudicating authority dropped the proceedings, allowing the credit. The Revenue appealed, arguing that the respondent had partially reversed CENVAT Credit availed, requiring them to reverse the entire credit to avail the benefit of the notification. The respondent, on the other hand, maintained that they were entitled to the credit as they had paid the duty in accordance with the notification. After hearing both parties, the Tribunal found that the duty paid for clearances to the Indian Railways using CENVAT Credit was eligible as credit for the respondent. The Tribunal cited a previous case to support the respondent's right to take suo moto credit and upheld the impugned order, dismissing the Revenue's appeal.

In conclusion, the Tribunal upheld the respondent's right to take suo moto credit of duty paid using CENVAT Credit account, as per Notification No. 01/2011-C.E. The decision was based on the fact that the duty paid for clearances to the Indian Railways during the specified period was eligible as credit for the respondent, and there was no violation of CENVAT Credit Rules.