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2018 (10) TMI 696

CENVAT Credit - Suo moto credit taken on excess credit debited by appellant - denial on the ground that credit availed without any supporting documents as prescribed under CENVAT Credit Rules, 2004 - Held that:- It is clear that the appellants had adjusted higher amount from the CENVAT credit amount towards discharging duty liability for the months of July and November 2012. Later, realizing the mistake, they had taken suo moto credit of the excess CENVAT amount debited by them. - The department has denied the suo moto credit alleging that there are no proper documents for availing the credit for the second time - this allegation by the department is erroneous for the reason that for the second time, the appellants have taken the credit .....

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the view that the credit availed is ineligible as such credit was not supported by documents and that the appellants are not entitled to take suo moto credit. Show cause notice was issued raising the above allegations and proposing to recover the wrongly availed credit to the tune of ₹ 11,48,094/- along with interest and also proposing to impose penalties. After due process of law, the original authority confirmed the demand, interest and penalties. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of the appellant, ld. counsel Ms. Krithika Jaganathan submitted that the appellant has been regularly discharging the excise duty at applicable rates and also filing returns for the same. During the months o .....

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d was eligible for the same. She submitted that the authorities below had relied upon the decision of the Larger Bench of the Tribunal in the case of BDH Industries Ltd. Vs. Commissioner of Central Excise - 2008 (229) ELT 364 (Tri. LB). That the said Larger Bench decision was per incuriam as the Hon ble Karnataka High Court by an earlier decision in the case of Motorola India Pvt. Ltd. - 2006 (206) ELT 90 (Kar.) had already held that the mistake in excess duty by adjusting in CENVAT credit can be corrected by suo moto credit by the assessee. She also relied upon the decision of the jurisdictional High Court in the case of ICMC Corporation Ltd. Vs. Commissioner of Central Excise - 2014 (302) ELT 45 (Mad.) and argued that suo moto credit invo .....

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in the case of BDH Industries Ltd. (supra), had held that the assessee cannot take suo moto credit. However, the Hon ble Karnataka High Court in the case cited supra had earlier held that the mistake of debiting the amount in the CENVAT credit can be corrected by the assessee later. Further, the jurisdictional High court in the case of ICMC Corporation Ltd. (supra) had occasion to analyse the very same and has held as under:- 13. We do not subscribe to the view expressed by the Revenue. Admittedly, the assessee originally availed the Cenvat credit on Service Tax for discharging its liability. However, for sound reasons, it reversed the credit. Strictly speaking, in this process, there is only an account entry reversal and factually there i .....

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