2017 (3) TMI 986 - AT - Central Excise

100% EOU - restoration of CENVAT credit debited earlier - whether the appellant is eligible to take re-credit of the CENVAT credit of ₹ 10,25,541/- debited earlier in the month of March 2008 for clearance of the imported raw material as such, after the equivalent amount was paid later through cash on 02.04.2009? - Held that - the duty amount which was paid earlier by reversing the CENVAT Credit Account, on found to be irregular, when paid subsequently through cash, it is an adjustment of book entry and accordingly, the appellant are eligible to take credit of the amount of ₹ 10,25,541/- in their CENVAT Credit Account paid/reversed earlier - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility for re-credit of CENVAT credit debited earlier for clearance of imported raw material.
2. Bar of limitation for refund claim due to payment and filing dates.

Analysis:
1. The appeal was filed against an order passed by the Commissioner (Appeals) regarding the eligibility of the appellant, a 100% EOU engaged in manufacturing, to re-credit CENVAT credit of ?10,25,541/- debited earlier for clearance of imported raw material. The appellant had paid the duty through CENVAT account initially, but later paid the equivalent amount in cash along with interest. The Revenue contended that the refund claim was time-barred due to the payment and filing dates. However, the Ld. Commissioner (Appeals) allowed the appeal, stating that the subsequent cash payment was an adjustment of book entry, making the appellant eligible for re-credit. The Tribunal upheld this decision, citing the judgment in CEAT Ltd.'s case, which supported the appellant's position.

2. The Revenue argued that the refund claim was time-barred as the cash payment was made after the initial reversal of credit and the filing date of the refund claim. On the other hand, the Respondent's Advocate contended that the cash payment was not an excess payment but a regularization of debits in the CENVAT Credit Account for raw material clearance. The Advocate referred to relevant case laws to support the argument that the cash payment was a mere adjustment of entries in the books of accounts. The Tribunal, after hearing both sides and examining the records, concluded that the appellant was entitled to re-credit the CENVAT amount based on the cash payment made later, as it was considered an adjustment of book entry. The Tribunal found no discrepancy in the Ld. Commissioner (Appeals)'s reasoning and dismissed the Revenue's appeal, deeming it meritless.

In conclusion, the Tribunal upheld the decision of the Ld. Commissioner (Appeals) and dismissed the Revenue's appeal, allowing the appellant to re-credit the CENVAT amount debited earlier for clearance of imported raw material based on the subsequent cash payment, which was considered an adjustment of book entry.