Knowingly availing duplicate CENVAT credit can justify deterrent restrictions when records show deliberate double entry.

The notification allowed withdrawal of the concession and imposition of restrictions where the prescribed authority, on records and evidence, formed a prima facie belief that the manufacturer had knowingly committed the specified violation. The revenue material showed that the assessee first took full CENVAT credit in one entry and later claimed the same credit again through multiple split entries against the same invoice. The explanation of bona fide mistake was rejected because the manner of entry indicated deliberate duplication. The conduct was treated as sufficient to infer knowledge and mens rea for invoking the deterrent mechanism, and the challenge to the restriction failed.

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Issues: Whether the revenue had prima facie material to conclude that the assessee knowingly availed CENVAT credit twice so as to justify withdrawal of the facility and imposition of restrictions under the notification.

Analysis: The notification governing the concession empowered the authorities to act where the prescribed authority, on the basis of records and evidence, formed a prima facie belief that the manufacturer had knowingly committed the specified violation. The department's material showed that the assessee first took the full credit in one entry and later took the same credit again by splitting it into numerous entries against the same invoice. The explanation of bona fide mistake was not accepted in view of the deliberate manner in which the second credit entry was made. The conduct disclosed sufficient material to infer knowledge and mens rea for the purpose of invoking the deterrent mechanism under the notification.

Conclusion: The revenue was justified in treating the assessee as having knowingly availed the credit twice, and the challenge to the deterrent action failed.

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