Revenue-neutral credit error treated as procedural lapse, so duty demand and penalty were not sustained.

Wrong routing of credit, where the goods remained otherwise eligible for Cenvat credit, was treated as a procedural lapse rather than a substantive infraction. The mistaken booking of credit in the PLA instead of the Cenvat account was regarded as revenue neutral, so the duty demand and penalty were not sustained. The note records that this did not raise any substantial question of law and that the assessee succeeded on the issue.

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Issues: Whether the assessee's wrong routing of credit and related handling of duty payment constituted only a minor procedural lapse so as to invalidate the duty demand and penalty.

Analysis: The disputed goods were ultimately eligible for credit, and the only mistake found was that the assessee took credit in the PLA instead of the Cenvat credit account. The authorities treated the exercise as revenue neutral and concluded that the lapse did not involve a substantive infraction warranting the confirmed duty demand and penalty. The Court agreed with the Tribunal that the mistake was procedural in nature and did not raise any substantial question of law.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the duty demand and penalty were not sustained.

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