Cenvat re-credit after demand is set aside cannot be denied for lack of Rule 7 document or separate refund claim.

Credit restored in the Cenvat account after appellate setting aside of the demand could not be denied merely because it was not supported by a document under Rule 7 of the Cenvat Credit Rules, 2002. The re-credit was a natural consequence of appellate relief, and the absence of the words "with consequential relief" in the appellate order did not extinguish that effect. The amount earlier reversed was treated in substance as a pre-deposit under section 35F of the Central Excise Act, 1944, so the assessee was not required to file a separate refund claim once the demand was set aside.

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Issues: Whether credit re-credited in the Cenvat account after the appellate authority set aside the demand could be denied for not being supported by a document under Rule 7 of the Cenvat Credit Rules, 2002, and whether such amount, being a pre-deposit under section 35F of the Central Excise Act, 1944, required the assessee to file a refund claim.

Analysis: The re-credit arose only because the original demand had been set aside in appeal. In such a situation, the credit was not taken on the basis of a prescribed document under Rule 7, but was restored as a consequence of the appellate relief. The absence of the words "with consequential relief" in the appellate order did not deprive the assessee of the natural consequences flowing from allowing the appeal. The amount reversed earlier was in substance a pre-deposit under section 35F, and once the demand was set aside, the assessee could not be compelled to pursue a refund claim on the premise that the deposit was made against the adjudication order rather than for appeal purposes.

Conclusion: The denial of re-credit was unsustainable, and the appeal was allowed in favour of the assessee with consequential relief.

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