TMI Blog2008 (7) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ian, Advocate, for the Appellant. Ms. M.I.J. Micheal, JCDR, for the Respondent. [Order]. - The appellants are challenging the order of the Commissioner (Appeals) dated 26-10-2007 wherein it was held that suo motu re-credit of cenvat credit in the RG23A Part-II account by the appellants was not in order and therefore the demand of Rs. 1,38,557/- confirmed against the appellants and penalty was upheld. The facts of the case in brief are that appellants were found to have availed credit of Rs. 98,859/- on 8 invoices. They had debited the whole amount on being pointed out in December, 2005 but the very next day, they reversed the credit as wrongly debited. Thereafter they reversed an amount of Rs. 30,363/- in respect of 5 invoices admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments advanced by both the sides. I find that the Commissioner (Appeals) has relied upon the decision of the Tribunal in the case of Jai Bhawani Concast Pvt. Ltd. v. CCE, Jaipur reported in 2007 (213) E.L.T. 195 (Tri.- Del.) in support of her conclusion that a refund claim should have been filed and suo motu debit entry is not in order. On the other hand the Advocate has relied upon the following decisions to support his contention that reversal of debit by way of credit entry is in order and it is only in the nature of arithmetical adjustment. 1. M/s. Visakhapatnam Steel Plant v. CCE, Vizag. [2002 (149) E.L.T. 708 (Tri. - Bang.) ]. 2. M/s. Silcal Metallurgic Ltd. v. CCE, Cochin [2002 (149) E.L.T. 711 (Tri. - Bang.) ]. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which was an erroneous debit. Therefore the Tribunal held that what was paid in September 1999 was duty and it was an erroneous payment of duty and therefore the only provision available is to claim refund under Section 11B. Therefore recourse could not have been taken to re-credit Rs. 1,31,309/- since it is not a mere case of adjustment of modvat credit. The observations of the Tribunal in this case would mean that when such reversal of debit entry is not a case of mere adjustment of modvat credit, refund claim has to be made and suo-motu reversal of debit entry is not permissible. In fact the two cases cited by me above have been referred to in the above decision and both have been distinguished. Therefore what is to be examined is whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich amounted to manufacture and therefore the appellants should have reversed the credit on the returned goods at the time of clearance and such amount should have been equal to the credit taken. To sum up, the credit utilized by the appellants to the extent of Rs. 23,916/- is found to be incorrect, and accordingly the demand to this extent is confirmed with applicable interest. The remaining amounts which have been demanded on the ground that suo-motu reversal of the debit entry was wrong are set aside. As regards penalty, it needs to be sustained in view of the fact that the appellants have indulged in reversal of credit, reversal of debit and without considering whether the process amounted to manufacture or not, paying duty as applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
