Cenvat credit cannot be taken suo motu on an assessee's letter; statutory refund procedure and sanction remain mandatory.

Cenvat credit could not be taken suo motu on the basis of an assessee's own letter, because a letter is not a prescribed duty paying document and any correction of duty accounts requires departmental sanction. The analysis also applied the statutory refund framework and unjust enrichment principle, meaning excess duty, even if paid twice, must be claimed through the proper refund procedure. The objection that the authorities travelled beyond the show cause notice was rejected because the notice specifically alleged credit on an unrecognised document and sought recovery of credit, interest, and penalty. The result was that the credit was held inadmissible and the challenge failed.

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Issues: (i) Whether credit of excess duty paid could be taken suo motu on the basis of a letter instead of a prescribed duty paying document; (ii) Whether the orders below travelled beyond the show cause notice by treating the matter as a suo motu refund issue.

Issue (i): Whether credit of excess duty paid could be taken suo motu on the basis of a letter instead of a prescribed duty paying document.

Analysis: The appellant had twice debited duty in the PLA and later entered the excess amount in RG 23A Part-II on the strength of its own letter. The controlling legal position, as reflected in the Larger Bench view relied upon in the order, is that the Cenvat scheme does not permit suo motu credit or refund without sanction by the proper officer. A letter issued by the assessee is not a duty paying document for taking credit, and any correction in duty accounts requires departmental sanction. The ruling also proceeds on the principle that refund of duty, even if arising from double payment, must conform to the statutory refund mechanism and the doctrine of unjust enrichment.

Conclusion: The credit taken by the appellant was inadmissible and the issue was decided against the assessee.

Issue (ii): Whether the orders below travelled beyond the show cause notice by treating the matter as a suo motu refund issue.

Analysis: The show cause notice specifically alleged that credit had been availed on the basis of the appellant's letter and not on a document recognised under the credit rules. The demand also sought recovery of the credit amount, interest, and penalty under the cited provisions. On that basis, the finding that the appellant could not take credit in RG 23A Part-II on its own did not go beyond the notice. The characterization of the transaction as impermissible credit on a non-prescribed document was within the pleadings and the notice.

Conclusion: The objection that the lower authorities travelled beyond the show cause notice was rejected.

Final Conclusion: The appeal failed because the appellant was not entitled to take credit suo motu on the basis of its own letter, and the impugned order was within the scope of the show cause notice.

Ratio Decidendi: Credit or refund of excise duty cannot be taken suo motu without recourse to the prescribed statutory procedure and sanction by the proper officer, and an assessee's own letter is not a duty paying document for Cenvat credit.

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