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2015 (12) TMI 942 - AT - Central ExciseDenial of suo moto CENVAT Credit - department took objection to availing of credit suo-moto and issued show cause notice dated 09.10.2009 on the ground that the there was no provision for taking such suo-moto credit and the appellants were not legally empowered to do so - Held that:- The appellants on their own decided to pay the amount by way of utilising cenvat credit. However, later on, after an year, even though the show cause notices were in adjudication, they decided to take suo-moto credit of the said amount already paid. Therefore, we find that payment of the same by way of RG 23A Part-II cannot be treated as deposit. The same is depicted in their statutory books and returns as duty. Revenue has also accounted the same as duty. Payment of duty through PLA or cenvat credit is treated at par. The nine Member Bench of the Hon'ble Supreme Court in the case of Mafatlal Industries Limited (1996 (12) TMI 50 - SUPREME COURT OF INDIA) has held that whatever amount has been paid to the department has to be claimed back if eligible by the route of refund under Section 11B, except for those payments which are ultra-vires. The Tribunal in the case of BDH Industries Limited (2008 (7) TMI 78 - CESTAT MUMBAI) has gone into the issue in detail and has held that such suo-moto re-credit cannot be taken The decision of the Commissioner to disallow the suo-moto credit is legally correct. In the case of ICMC Corporation Limited vs. CESTAT (2012 (3) TMI 455 - CESTAT CHENNAI), the assessee had re-credited the credit reversed on those services mentioned under Rule 6(5) of Cenvat Credit Rules. In the case of Shyam Textile Mills & Ans. vs. UOI (2004 (6) TMI 590 - GUJARAT HIGH COURT), the issue pertained to deemed credit. In the case of Sopariwala Exports Pvt. Limited (2013 (5) TMI 430 - CESTAT AHMEDABAD), it was a question of duty paid twice over. - since the show cause notices have been set-aside later on by the Tribunal, we do not find any reason to demand interest. We also find that though the appellant has contravened the provisions by taking suo-moto credit, a penalty of ₹ 7 Crores is excessive, and it should be reduced drastically to be commensurate with the offence committed - Decided partly in favour of assessee.
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