2019 (11) TMI 1126 - AT - Central Excise

Re-credit of excess duty debited on CIF value, for export - rebate of duty paid on finished goods - Rule 18 read with N/N. 19/04-CE (NT) dated 6.9.2004 - HELD THAT - It is accepted by the Revenue, as pointed out by the Department from para 6 of the order-in-original, that appellant is entitled to refund of the excess paid duty, which is in the nature of deposit with the Government - in view of the law laid down by the Madras High Court in M/S. ICMC CORPORATION LTD. VERSUS THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL 2014 (1) TMI 1473 - MADRAS HIGH COURT wherein an assessee is entitled to take re-credit of the undisputed amount and have taken the credit under intimation to the Department. The proceeding for disallowing the same is unwarranted and there is no requirement to file a separate application for refund of duty under Section 11B of the Act. The Commissioner (Appeals) in the impugned order have erroneously rejected the appeal observing that the appellant assessee have taken suo motu credit without any valid duty paying documents. This observation is factually wrong, vitiating the impugned order. Further, it is found that the impugned order is cryptic and non speaking. The appellant have rightly taken cenvat credit under intimation to Revenue - appellant shall entitle to consequential refund in terms of Section 142(3) of the Central Goods and Services Tax Act, 2017 - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Disallowance of re-credit of excess duty debited on CIF value for export.
2. Imposition of penalty and interest under Cenvat Credit Rules, 2004.

Analysis:
1. The appellant, engaged in manufacturing medicines and bulk drugs, exported goods under a rebate claim but later corrected the claim to the FOB value as per the rebate sanctioning authority's advice. The appellant voluntarily corrected the rebate claim and took suo motu credit of the excess duty paid amount. The dispute arose when the Assistant Commissioner issued a show cause notice disallowing the re-credit, imposing penalty, and interest. The Tribunal held that the appellant was entitled to take re-credit under intimation to the Department, citing precedents where similar actions were deemed justified. The Tribunal emphasized that there was no rejection of the rebate claim, as the correction was made based on the FOB value, and no separate application for refund was required. The Tribunal allowed the appeal, stating that the penal provisions were not attracted, and ordered the refund of the excess duty paid amount.

2. The Commissioner (Appeals) upheld the disallowance of re-credit, citing the absence of valid duty paying documents. However, the Tribunal found this observation to be factually incorrect, as the appellant had intimated the Revenue about the re-credit and had followed the necessary procedures. The Tribunal also highlighted a case where a similar re-credit was allowed by the High Court, emphasizing that the appellant's actions were justified under the Cenvat Credit Rules. The Tribunal concluded that the appellant had rightly taken the credit under intimation to the Revenue, setting aside the impugned order and directing the appellant to receive a refund in accordance with the Central Goods and Services Tax Act, 2017.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal precedents cited, and the final decision reached by the Tribunal.