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TMI Blog2018 (4) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable to the assessee, such duty is required to be paid through PLA and the assessee is entitled to the refund of such duty paid through their account current. 2. In the present case, during the period may, July, September, November 2006 and January 2007 the appellant imported raw materials and paid additional duty of customs on the same to the extent of Rs. 14,51,695/-. However they did not avail the Cenvat credit of the duty so paid by them. Consequently the duty required to be paid by them in cash fell short of the Cenvat credit and as such the same was paid by the appellant in cash by debiting the PLA. Subsequently they claimed the refund of the said duty so paid in cash. Inasmuch as the refunds have to be availed by self crediting the same, the Revenue entertained a view that such refunds were in excess and undue and as such proceedings were initiated by way of issuance of a show cause notice dated 20.05.2007 proposing to recovery the said refund claims. The notice also proposed confirmation of interest and imposition of penalty. 3. The appellant contended before the lower authorities that they did not avail the Cenvat credit of additional duty of customs inasmuch as the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid the higher duty in cash, they would be entitled to the refund of the same. If the cash payment was to be on the lower side, if the appellant would have availed the Cenvat credit, he would have been entitled to the refund of lower amount. In essenee, it has to be held that the entire situation was the Revenue neutral. The refund is admissible to the appellant only of that amount, which he has already taken out of his pockets by way of paying duty in cash. Accordingly it cannot be said that the appellant has claimed excess refund, thus leading to the recovery of the same. 7. It is also in record that the inadvertent mistake committed by the assessee was subsequently rectified as they took the credit of the additional duty. Such credit can be utilised by them for future payments, thus leading to less payments in cash and consequent less refunds. The entire situation is Revenue neutral and it cannot be said that the appellant benefited by not availing the credit and paying the higher amount of duty in cash. In fact it can be specifically observed that by non-availment of credit was disadvantageous to the appellant as they had to shelve out excess cash from their pockets for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the self credit under para 2 (A) has improperly ascertained the amount of duty credit, taken it in his account and further utilised it in the discharge of duty in contravention of the provisions of the said Notification. This has resulted in the appellant availing undue refund for the month of May, July, September, November, 2006 & January, 2007. Since, the amount of refund is to the extent of exemption allowed by the Notification, the appellants have exceeded the extent of the exemption permissible under Para 2(A) of the Notification. The fact that the situation is Revenue neutral does not take away from the settled position of law that the conditions of an exemption Notification have to be followed strictly. This has been laid down in numerous judicial pronouncements of Hon'ble Supreme Court. In one such decision, in the case of CCE, Pondicherry Vs. Honda Siel Power Products Ltd. 2015 (323) ELT 644 (S.C.), where the appellant had paid the duty through cenvat credit when the Notification required payment in cash or through account current, the Hon'ble Supreme Court held as below: "4. We find that the Tribunal has decided the case in favour of the assessee by observing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the third member to resolve the following issues: Difference of Opinion Whether in view of the revenue neutral situation, the compliance with the condition of notification 56/2002-CE should not be insisted upon and the appeal allowed, as held by Member (Judicial); or In view of the non-compliance with the mandatory condition of Notification No. 56/2002-CE, the demand of wrongly availed refund by way of self-credit should be upheld but no interest and penalty be imposed, as held by Member (Technical). Devender Singh Member (Technical) Archana Wadhwa Member (Judicial) Per. B. Ravichandran :- This appeal was referred to the third Member on the following points of difference :- "(A) Whether in view of the revenue neutral situation, the compliance with the condition of Notification 56/2002-CE should not be insisted upon and the appeal allowed, as held by Member (Judicial) ; (B) In view of the non-compliance with the mandatory condition of Notification No. 56/2002-CE, the demand of wrongly availed refund by way of self-credit should be upheld but no interest and penalty be imposed, as held by Member (Technical)". 2. Heard both the sides and perused the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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