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2018 (11) TMI 524 - AT - Central ExciseRecovery of re-credited amount alongwith Interest and penalty - Consolidated reversal of the individual debit entries in the CENVAT credit account upon discharge of duty liability for the second time on clearance to customers - Held that - There is no dispute on the quantum of duty liability discharged thereby. It is the contention of Learned Authorised Representative that, notwithstanding the discharge of duty liability twice, assessee was not entitled to take credit on its own except in relation to inputs received in the factory of manufacture. The assessee was, thereby, held to be eligible for that quantum of credit from the date on which the goods were cleared to their customers on payment of appropriate duties of central excise. The proceedings for recovery of that amount cannot be sustained in consequence - With the entitlement of re-credit, effective from the date of payment of duties for the second time, there is no scope for recovery of interest. Appeal allowed - decided in favor of assessee.
Issues:
Recovery of duty discharged by debit of CENVAT credit, eligibility for credit on goods clearance, refund claim rejection, entitlement for re-credit, imposition of penalty. Analysis: The case involves an appeal by M/s Andrew Telecommunications India Pvt Ltd against the recovery of duty amounting to ?1,28,63,118, representing duty discharged by debit of CENVAT credit upon removal of goods to a temporary storage place, but later reversed in their CENVAT credit account after debiting the credit once more upon disposal of the goods. The issue revolved around the eligibility for consolidated reversal of the individual debit entries in the CENVAT credit account upon the discharge of duty liability for the second time on clearance to customers. The appellant, a manufacturer of 'base stations,' sought permission for storage at a hired premises due to space constraints, which led to debiting the CENVAT credit account with ?1,28,63,118 on assumed value of clearance. Subsequently, the actual duty of ?1,06,94,122 was debited upon disposal, with the earlier debits re-credited. The central excise authorities advised filing a refund claim due to the doubled discharge of duty liability, which was initially rejected but later approved by the first appellate authority. The refund was sanctioned in a subsequent order dated 12th October 2015. The Tribunal allowed the introduction of the refund sanction in the proceedings, leading to the consideration of the two appeals. The acknowledgment of the lack of authority to retain the duty discharged initially established the entitlement for reinstating the debited amount. Consequently, the appellant was held eligible for the credit from the date of goods clearance to customers, rendering the proceedings for recovery unsustainable. The Tribunal held that with the entitlement of re-credit, there was no basis for the recovery of interest. Thus, the impugned order was set aside, and the appeal of the assessee was allowed while the appeal of the Revenue was dismissed.
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