2018 (12) TMI 713 – CESTAT KOLKATA – TMI – Refund clam – payment of duty twice – CENVAT Credit – inputs/input services – coir mattress – benefit of N/N. 01/2011-CE dated 01.03.2011 – Section 11B of CEA – Penalty – Held that:- Department have not alleged any suppression of facts with intent to evade payment of duty. Further, the first appellate authority has held that there was no such intent to warrant imposition of penalty. It is not in dispute that duty has been paid twice, once from the cenvat account and subsequently by cash through PLA. It is also not in dispute that the respondent assessee was eligible for refund.
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The only dispute was that whether the re-credit could be taken suo moto or a refund claim was required to be filed. Thus under the facts and circumstances of the case no penalty is imposable.
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The issue is covered by the decision of the Tribunal in the case of Commissioner of Central Excise, Surat-II vs. Vardhman Acrylics Ltd. [2013 (5) TMI 6 – CESTAT AHMED
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2% Adv w.e.f. March, 2012]. It is the case of the appellant revenue that one of the specific conditions in the notification is that cenvat credit on inputs and input services would not be availed for payment of central excise duties. It is also the case of the appellant revenue that the respondent assessee has been availing cenvat credit against their clearance of coir mattress during the period from July, 2011 to August, 2012. On being pointed out the respondent assessee paid duty of ₹ 13,31,116/- alongwith interest of ₹ 96,591/- through cash in PLA on 15.06.2012 for the clearances of coir mattresses and informed the Assistant Commissioner and Superintendent vide their letter dated 18.06.2012 and also submitted that they will re-credit their cenvat account by that amount so that the same can be used for payment of duty on other products. Re-credit was taken on 17.08.2012 and reflected in the ER-1 Return and again intimation was given to the Assistant Commissioner and Range
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t this reversal amounts to correction of entries in the cenvat account and does not tantamount to refund of tax already paid and hence provisions of Section 11B are not applicable in such cases and accordingly, suo moto credit can be taken. Ld. Advocate relied upon various decisions in support of his submissions and filed written submission. 4. Heard both sides and perused the appeal records. 5. I find that the issue in the present appeal is regarding suo moto re-credit of duty amount of ₹ 13,31,116/- taken by the respondent assessee vide RG-23, Pt-II Sl.No.368 dated 17.08.2012 without filing any claim for refund under Section 11B. On perusal of the grounds of appeal filed by the department I find that they have not alleged any suppression of facts with intent to evade payment of duty. Further, the first appellate authority has held that there was no such intent to warrant imposition of penalty. It is not in dispute that duty has been paid twice, once from the cenvat account and
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the refund procedure under Section 11B of the Central Excise Act, 1944. It is observed that the earliest of the relied upon judgments is that of the Hon ble Supreme Court in the case of Mafatlal Industries Limited. v. UOI [1997 (89) E.L.T. 247 (S.C.)] which was delivered in relation to the amendment made in 1991 to introduce the concept of unjust enrichment with respect to refund cases under Section 11B of the Central Excise Act, 1944. Section 11B of the Central Excise Act talks about refund of duties and the related amendment was introduced to the effect that claimant should establish that the burden of duty, for which refund claim is filed, is not passed on to the customers. In the present case, the issue is not regarding refund of duties but taking of admissible credit, which was earlier reversed under protest and on receipt of a favourable order from the first appellate authority. Therefore, the judgment of the Hon ble Supreme Court in the case of Mafatlal Industries Limited (supr
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Cenvat credit taken is reversed than it is considered to be as if no credit is taken. After reversing the credit, respondents in this case agitated the issue and got the decision in their favour. Once an issue on admissibility of Cenvat credit is decided in their favour by appellate authority then the Cenvat credit becomes admissible. There is no law to deny Cenvat credit when the same is held admissible and an assessee does not require the approval of any authority to take the admissible Cenvat credit as per the Cenvat Credit Rules. This was not a situation where a refund claim was required to be filed to stand the test of unjust enrichment as per the law laid down by the Hon ble Supreme Court in the case of Mafatlal Industries Limited. (supra). The relied upon judgments by the appellant are thus distinguishable and not applicable to the facts and circumstances of this case. It has also been held by the CESTAT, Ahmedabad Bench in the case of Bock India Pvt. Limited. v. CCE, Vadodara [
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