2018 (10) TMI 696 – CESTAT CHENNAI – TMI – 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.
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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 only because they had made a wrong book entry at the initial stage. This does not amount to availing credit for second time.
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The Hon’ble Karnataka High Court in the case of Motorola India Pvt. Ltd. [
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ny supporting documents as prescribed under CENVAT Credit Rules, 2004. The appellants explained that they had paid excess duty utilizing the CENVAT credit for the month of July 2012 and November 2012 and on realizing the same had taken suo moto credit of the said amount. The department was of 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 fili
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payment of excise duty and the entry of adjustment / debit was only an error made in the book entry. The recredit so taken by the appellant was declared in ER-1 returns filed for July 2014. The appellant also informed such recredit at the time of audit investigation. The department alleges that the appellant ought not to have taken suo moto credit and ought to have filed a refund claim for the excess duty paid. She submitted that the appellant had availed the recredit only because the credit had been not utilized for any duty liability and 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 exc
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dure for taking suo moto credit under the Act. 4. Heard both sides. 5. From the Table above, 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. I find that this allegation by the department is erroneous for the reason that for the second time, the appellants have taken the credit only because they had made a wrong book entry at the initial stage. This does not amount to availing credit for second time. The Larger Bench of the Tribunal 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 de
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as per Rule 6(5) of the Cenvat Credit Rules, 2004. as there is no dispute of the fact that a sum of ₹ 3,21,308/- available as Cenvat credit was in respect of input services, which are given under Rule 6(5) of the Cenvat Credit Rules, 2004. When that being the case, in respect of those services specifically mentioned under Rule 6(5) of the Cenvat Credit Rules, 2004 as it existed during the relevant period viz., 2004-2006 getting the reversal of the entry is in tune with its stand taken, which was accepted by the Tribunal in the earlier round of litigation. 6. This decision was followed by the Hon ble High Court of Allahabad in Krishnav Engineering Ltd. – 2016 (331) ELT 391 (All.). Following the said decisions of the Hon ble High Courts, I am of the view that the allegations in the show cause notice cannot sustain. The impugned order is set aside and the appeal is allowed with consequential relief, if any. (Dictated and pronounced in open court) – Case laws – Decisions – Judgeme
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