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2015 (12) TMI 942 - CESTAT AHMEDABAD

2015 (12) TMI 942 - CESTAT AHMEDABAD - TMI - Denial 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 adju .....

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d 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 Li .....

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unal, 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. - Appeal No.: E/10297/2013 - ORDER No. A/11807/2015 - Dated:- 8-12-2015 - Mr. P.K. Das, Member (Judicial) And Mr. P.M. Saleem, Member (Technical) For the Petitioner : Shri Willingdon C .....

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the demands were confirmed against them in the adjudication proceedings. However, later on, in September 2008 and October 2008, the appellant decided that this payment of ₹ 26 Crores was not warranted and therefore, they took suo-moto credit of the same amount in RG 23A Part-II. The said amount in their books was later utilised for payment of duty. The 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 .....

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ed penalty of ₹ 7 Crore on the appellant. 2. Heard both sides. The learned Counsel for the appellants submits that the payment of ₹ 26 Crore made on 31.3.2007 should be treated as a deposit only. He contends that there was no confirmed duty liability on the appellants and therefore taking the same as re-credit in 2008, cannot be assailed. However, he fairly concedes that there are no specific provisions for taking such re-credit suo-moto but contends that there are no contrary provis .....

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elies upon the following decisions:- (a) ICMC Corporation Limited vs. CESTAT - 2012-TIOL-1116-CESTAT-MAD (b) Shyam Textile Mills & Ans. vs. UOI -2005 (67) RLT 488 (Guj). (c) Sopariwala Exports Pvt. Limited vs. CCE - 2013 (291) ELT 70 (Tri.) 3. On the other hand, learned Additional Commissioner (Authorised Representative) for Revenue submits that the appellants have paid the amount of ₹ 26 Crores against the demands raised against them vide the two show cause notices. The fact that this .....

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rned Counsel for the appellants. He also drew attention of the Bench to the decision of the Larger Bench in the case of BDH Industries Limited vs. Commissioner of Central Excise (Appeals), Mumbai (supra) and submitted that the issue therein was identical and the same was discussed in great detail and the Tribunal decided the issue in favour of the Revenue relying on the decisions of the Hon ble Supreme Court in the case of Mafatlal Industries Limited vs. UOI - 1997 (89) ELT 247 (SC) and Sahakari .....

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e 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 Honble Supreme Court in the case of Mafatlal Industries Limited (supra) has held that whatever amount has been paid to the department has to be claimed back if eligibl .....

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icated under the provisions of Central Excise and Salt Act or the Customs Act as the case may be. The proposition (ii) relates only to those claims where the levy itself has been held unconstitutional which is not so in the present case. Section 11B has very wide scope inasmuch as it allows even purchaser of goods to claim refund of duty recovered from him if the duty is found to be non-payable and he is able to show that he has not passed on the incidence of duty. Thus not only a manufacturer b .....

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is towards payment of duty only and therefore refund of these amounts has to be considered as refund of duty only. The PLA account and the credit accounts are required to be submitted to the department and any correction carried therein, need to have departments sanction. We also note that the law relating to refund has been fully analysed by the Apex Court in the case of Mafatlal Industries (cited supra) which makes it very clear that all types of refund claim be there of excess duty paid or .....

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