2014 (3) TMI 416 - AT - Central Excise

Availment of CENVAT Credit - Whether appellant can take suo moto credit of excess duty debited for second time payment of duty or they were required to claim in respect of the excess amount debited towards the payment of duty twice over - Held that - The fact was brought to the notice of the department by the appellants in their letter dated 12th June, 2001. In fact, the letter requests the department for correcting the error. This is a simple arithmetical mistake. The departmental authorities could have advised the appellants to adjust the excess amount towards payment of duty for subsequent periods. But they advised the appellant to file a claim for refund. If at all a refund claim is required, the first letter informing the department of the mistake and requesting for permission to rectify the same should be taken as claim for the purpose of Section 11B. Alternatively, the contention of the appellant that the amount paid by mistake is not duty merits consideration. In fact, duty paid on the goods is indicated in the invoices. The amount erroneously paid in excess does not find mention in any invoices. In that sense, the amount paid should be considered as deposit and not duty - Following decision of BDH Industries Ltd. Vs. Commissioner of Central Excise (Appeals), Mumbai-I 2008 (7) TMI 78 - CESTAT MUMBAI - Decided in favour of assessee.

Summary

Issues:
- Excess duty payment and re-credit by the appellant
- Dispute over the appellant's right to claim suo moto credit
- Interpretation of legal precedents regarding similar cases

Analysis:

The judgment in this case revolves around the appellant's payment of excess duty in March 2008, which was later re-credited in April 2008. The department alleged that the appellant wrongly took the credit suo moto. The adjudicating authority confirmed the demand of Cenvat Credit along with interest and imposed a penalty. The appellant appealed this decision, but the first appellate authority upheld the original order.

The appellant's counsel argued that similar cases have been decided in favor of the appellant by citing legal precedents such as the case of Sopariwala Exports Pvt. Ltd. and S. Subrahmanyan & Co. The counsel highlighted that these precedents support the appellant's right to take suo moto credit in such situations.

On the other hand, the departmental representative referred to the judgment of the Larger Bench in the case of BDH Industries Ltd., which held that there is no provision to take suo moto credit even if duty is paid twice. The representative also mentioned the case of Motorola India Pvt. Ltd., where the High Court set aside the Tribunal's decision, supporting the department's stance.

After considering both arguments and examining the legal precedents cited, the judge found that the BDH Industries Ltd. case does not apply to the current situation. The judge also noted the decision in the case of S. Subrahmanyan & Co., where the High Court ruled in favor of the appellant in a similar scenario. Given the direct relevance of the High Court decisions to the issue at hand, the judge decided to follow those precedents.

Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The judgment emphasizes the importance of legal precedents and the specific application of relevant decisions to determine the outcome of similar cases.