2016 (1) TMI 14 - AT - Central Excise

Claim of refund or suo-moto re-credit - Reversal of excess Cenvat credit wrongly - Held that - It is a peculiar case where the appellant himself has reversed excess Cenvat credit which they want to take re-credit. For this excess reversal of Cenvat credit, only the account books/statutory records are the documents to be verified by the authorities below. This fact has not been disputed, therefore, we hold that appellant is entitled to take refund/re-credit of the excess amount Cenvat credit reversed by them. - refund claim filed by the appellant are allowed which will regularize the suo-moto Cenvat credit taken by the appellant. - Decided in favour of assessee.

Summary

Issues:
Appeal against denial of refund claim for excess reversal of Cenvat credit.

Analysis:
The appellant, a job worker of a company, was reversing Cenvat credit for inputs used in job work based on a formula. However, during a specific period, they miscalculated the reversal resulting in excess credit reversal of a significant amount. Upon realizing the error, the appellant took suo-moto credit and later filed a refund claim for the excess amount. The claim was rejected due to a lack of documentary evidence. The appellant contended that they followed the prescribed procedure and had intimated the correct input attribution to the Department. The main issue was the rejection of the refund claim based on procedural grounds.

The Tribunal noted that the appellant had voluntarily reversed excess Cenvat credit and sought re-credit. The only verification required was of the account books/statutory records. Since this fact was undisputed, the Tribunal held that the appellant was entitled to the refund/re-credit of the excess amount reversed. The Tribunal emphasized that in such cases, where the appellant rectified the error themselves, the account books were crucial for verification. The rejection of the refund claim solely on procedural grounds was deemed unjustified.

Consequently, the Tribunal allowed the refund claim, regularizing the suo-moto credit taken by the appellant. The impugned order denying the refund was set aside, and the appeal was allowed. The decision highlighted the importance of proper documentation and the significance of rectifying errors promptly to claim rightful credits. The judgment underscored the principle of allowing refunds in cases where excess credits were reversed inadvertently, subject to proper verification of records.