Cenvat re-credit allowed where duty was later paid in cash, neutralising the earlier credit debit.

Where duty initially paid through Cenvat credit was later discharged again in cash through PLA, the earlier debit in the credit account could be re-credited because the cash payment neutralised the original utilisation of credit. The objection that re-credit was unsupported by the show cause notice and that it was not taken on eligible documents was rejected as inapplicable to a reversal made only to offset the subsequent cash payment. On these facts, the appellate order permitting re-credit was upheld and the Revenue's challenge failed.

---

---

Issues: Whether, after the duty burden was subsequently discharged in cash through PLA, the assessee was entitled to re-credit the amount earlier debited from the Cenvat account for payment of duty.

Analysis: The duty had already been paid in cash after the initial payment through Cenvat credit, and the earlier debit entry in the credit account was reversed only to neutralise that subsequent cash payment. The denial of re-credit was not supported by the show cause notice, and the objection that the re-credit was not taken on eligible documents was not applicable to such a reversal. In these facts, the earlier utilisation of credit stood balanced by the later cash payment, and no infirmity was found in the appellate order allowing re-credit.

Conclusion: The assessee was entitled to re-credit of the amount earlier utilised from the Cenvat account, and the Revenue's challenge failed.

---