Suo motu CENVAT re-credit permitted after cash payment replaced earlier tax debit; refund claim not required.

Where an assessee discharged service tax on GTA services by debiting CENVAT credit and later made the payment in cash, the earlier debit could be re-credited suo motu if the credit was otherwise admissible. The Tribunal held that a prior refund claim under Section 11B of the Central Excise Act, 1944 was not required in such circumstances, because the cash payment had replaced the earlier credit utilisation and no separate refund machinery was necessary. The impugned order was set aside and consequential relief was granted to the assessee.

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Issues: Whether re-credit of duty paid through CENVAT credit account on GTA services, after subsequent cash payment, could be taken suo motu without filing a refund claim.

Analysis: The dispute concerned an assessee who initially discharged service tax liability under the reverse charge mechanism by debiting CENVAT credit, later paid the amount in cash after audit objection, and then re-credited the earlier debit in its books. The Revenue contended that a refund claim under Section 11B of the Central Excise Act, 1944 was necessary before such re-credit. The Tribunal followed the view that where the payment was made in cash after the earlier debit and the credit balance was otherwise admissible, suo motu re-credit was permissible.

Conclusion: The assessee was entitled to take suo motu re-credit and no prior refund claim was required.

Final Conclusion: The impugned order was set aside and the appeal was allowed, granting consequential relief to the assessee.

Ratio Decidendi: Where an assessee initially pays service tax from CENVAT credit, later makes good the amount in cash, and the credit is otherwise admissible, re-credit may be taken suo motu without first filing a refund claim under Section 11B of the Central Excise Act, 1944.

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