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2018 (9) TMI 1436 - HC - Central ExciseCENVAT credit - credit was reversed now seeks to avail suo-moto credit - Department opined that once the assessee pays back the duty of excise and that in the instant CENVAT credit availed on SKO, the proper course is to seek refund claim under Section 11B of the Central Excise Act and therefore, taking suo-motu recredit of the duty reversed appears to be incorrect - whether the assessee was entitled to suo-motu avail credit of central excise duty which they have reversed? Held that - Unfortunately, before the Tribunal, the parties appears to have not made any endeavour to put-forth their factual contentions. Thus, unless and until the factual contention is properly considered, conclusion cannot be arrived at - Furthermore, the question as to whether to what extent supplementary invoices would aid the stand of the assessee is also required to be gone into, since admittedly IOCL was a registered dealer of SKO only on 26.10.2005, much after the purchases effected by the assessee which was during the period from 01.02.2005 to 30.10.2005. The entire proceedings required to be redone and the factual matrix has to be considered - the matter is remitted back to the Adjudicating Authority for fresh consideration on the factual position - appeal allowed by way of remand.
Issues:
1. Entitlement to suo-motu avail credit of central excise duty. 2. Validity of reversing and recrediting CENVAT credit. 3. Interpretation of appellate authority's findings on eligibility for credit. 4. Dispute regarding registration of IOCL as a dealer of SKO. 5. Need for reconsideration of factual contentions in the case. Analysis: 1. The primary issue in this case is whether the assessee was entitled to suo-motu avail credit of central excise duty that they had previously reversed. The department disputed the right of the assessee to avail the credit due to discrepancies in the procurement of "Superior Kerosene Oil" (SKO) from Indian Oil Corporation Limited (IOCL) and subsequent issuance of invoices by Chennai Petroleum Corporation Limited (CPCL). 2. The department requested the assessee to reverse the irregularly taken CENVAT credit on SKO, leading to a show cause notice for demanding the recredited amount under the CENVAT Credit Rules, 2004. The Assessing Officer held that recrediting without permission was impermissible, citing relevant legal precedents. 3. The Commissioner (Appeals) dismissed the appeal, misinterpreting the findings of the Original Authority regarding the assessee's eligibility for credit. The High Court noted the factual error in the Commissioner's decision, emphasizing the core dispute over the assessee's entitlement to credit. 4. The issue of IOCL's registration as a dealer of SKO was crucial, as IOCL's registration status impacted the validity of passing on CENVAT credit to the assessee. The Tribunal's decision was questioned for not adequately addressing the factual contentions related to IOCL's registration timeline and the impact of supplementary invoices. 5. The High Court concluded that a reconsideration of the factual matrix was necessary, highlighting the need to reexamine the eligibility of the assessee for credit in light of IOCL's registration status and the supplementary invoices issued. The matter was remitted back to the Adjudicating Authority for a fresh consideration based on the factual position, allowing both parties to present their contentions. In summary, the judgment focused on the disputed entitlement of the assessee to avail CENVAT credit on SKO, highlighting discrepancies in procurement and registration issues. The decision emphasized the importance of factual considerations and the need for a thorough reassessment by the Adjudicating Authority to determine the validity of the credit availed by the assessee.
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