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of <h1>Tribunal overturns disallowance order, citing lack of notice allegation, finds appellant's actions justified.</h1> The Tribunal set aside the order disallowing credit, recovery, interest, and penalties, as the disallowance based on the appellant's suo motu ... Cenvat credit - MS Ingots - Interest - Penalty - The allegation in the show cause notice is that credit has been availed without proper documents - Held that: - As the issue whether they could take credit on MS items was being contested by them for the periods May, 2005 to December, 2008 and August, 2009 to April, 2010, they informed the department that they are not bound to reverse the credit. They thus took credit after informing the department about their intention. It is only thereafter that the present show cause notice is issued alleging that suo motu taking of credit is not legal or proper. It has also to be mentioned that appellant took re-credit within a period of about two months. In the peculiar facts presented by this case, the credit having been reversed as per the letter issued by department, there would be no impediment in taking re-credit of the same - Appeal allowed. Issues: Alleged irregular availment of credit on MS items, reversal of credit on department's direction, legality of suo motu credit takingIssue 1: Alleged irregular availment of credit on MS itemsThe appellant, engaged in manufacturing various products, was issued show cause notices for allegedly irregularly availing credit on MS items for specific periods. The Range Superintendent directed the appellant to reverse a certain credit amount, which they did under pressure. Subsequently, they re-availed the same credit on the Superintendent's advice. The original authority disallowed the credit, citing it as against the law, and imposed penalties. The Commissioner (Appeals) upheld this decision, leading to the current appeal.Issue 2: Reversal of credit on department's directionThe appellant's counsel argued that the department issued show cause notices for specific periods but later directed the reversal of credit for an unnotified period. The appellant contested this reversal, informing the department of their disagreement and subsequently re-availed the credit to restore the initial availed amount. The authorities went beyond the show cause notice, claiming the suo motu credit was improper, contrary to the appellant's argument.Issue 3: Legality of suo motu credit takingThe Respondent argued that the appellant could not take credit suo motu, justifying the authorities' findings. However, they acknowledged that no show cause notice was issued for the period between the two notices alleging irregular credit availment on MS items. The Tribunal found that the disallowance of credit based on the appellant's suo motu credit-taking was not sustainable as it was not raised in the show cause notice. The appellant had initially availed credit on valid documents, reversed it under departmental pressure, and re-availed it after informing the department of their intention.In conclusion, the Tribunal set aside the impugned order disallowing credit, recovery, interest, and penalties, as the disallowance based on the appellant's suo motu credit-taking was deemed unsustainable due to the lack of such an allegation in the show cause notice. The appellant's actions were found to be within their rights, given the circumstances and communication with the department.
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