2019 (3) TMI 408 – CESTAT MUMBAI – TMI – Suo moto credit of excess credit reversed – section 11B of CEA – Held that:- The fact is not under dispute that the appellant had inadvertently reversed the amount of 7% in the Cenvat account, instead of the prescribed amount of 6% of the value of exempted goods. The process of reversal of excess Cenvat credit and taking of re-credit of the said excess amount involve only accounting/book adjustment. There was practically no outflow of fund towards this accounting adjustment. Thus, the provisions of Section 11B of the Act for refund claim will not be applicable to the case in hand.
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The Hon’ble Madras High Court in the case of ICMC Corporation Ltd [2014 (1) TMI 1473 – MADRAS HIGH COURT] have held that process involving availment of suo motu Cenvat credit of the amount reversed earlier is a technical book adjustment and in absence of outflow of funds from assessee, filing of refund claim under Section 11B of the Act does not arise.
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App
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l Excise duty and also exempted by virtue of above notification, the case of the appellant falls under the provisions of Rule 6 of the Cenvat Credit Rules, 2004. The appellant had opted for payment of amount as provided under sub-rule 3 of Rule 6 ibid. Being a manufacturer of excisable goods, the appellant was required to pay amount of 6 percent of the value of exempted goods. However, due to inadvertence, instead of paying such amount, the appellant had paid an amount of 7 percent through its Cenvat account, which was payable by a service provider and not the manufacturer. Upon realization of mistake of excess payment of amount, the appellant had re-credited the said amount in the Cenvat register. Taking of suo moto credit by the appellant was disputed by the department on the ground that the appellant was required under the statute to file the refund application under Section 11B of the Central Excise Act, 1944 instead of taking re-credit on its own. 3. The Learned Advocate appearing
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hat the appellant had inadvertently reversed the amount of 7% in the Cenvat account, instead of the prescribed amount of 6% of the value of exempted goods. The process of reversal of excess Cenvat credit and taking of re-credit of the said excess amount involve only accounting/book adjustment. There was practically no outflow of fund towards this accounting adjustment. Thus, the provisions of Section 11B of the Act for refund claim will not be applicable to the case in hand. By analyzing the statutory provisions, the Hon ble Madras High Court in the case of ICMC Corporation Ltd (supra) have held that process involving availment of suo motu Cenvat credit of the amount reversed earlier is a technical book adjustment and in absence of outflow of funds from assessee, filing of refund claim under Section 11B of the Act does not arise. The relevant paragraphs in the said judgment are extracted herein below: 13. We do not subscribe to the view expressed by the Revenue. Admittedly, the assesse
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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. 14. We do not find any good ground to hold that it was a case of refund of duly falling under Section 11B of the Central Excise Act, 1944 and that the assessee was to comply with the provisions of Section 11B of the Act. The view of the Tribunal that the assessee should seek reversal in the appropriate judicial forum, if the assessee was aggrieved by the earlier order herein does not arise at all. 15. even a cursory reading of the order of the tribunal in the earlier round of litigation would show that it accepted the assessee s case of suo motu reversal of the entry. That being the case, the subsequent conduct of the assessee for a follow up action on an amount of ₹ 3,21,308/-, which is only an account entry adjustment, technical
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