Appellate Tribunal overturns recovery order, allows re-credit of duty paid

The Appellate Tribunal CESTAT Mumbai allowed the appeal by M/s Aplab Ltd, setting aside the order for recovery of wrongly restored credit without proper authority and penalty under rule 15 of CENVAT Credit Rules, 2004. The Tribunal found that the appellant was entitled to re-credit of the duty paid from the CENVAT account as they had paid in cash complying with department instructions. Emphasizing the importance of proper procedures and considering double payment circumstances, the Tribunal held that the proceedings against the appellant were not sustainable.

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Issues:
Recovery of wrongly restored credit without proper authority and imposition of penalty under CENVAT Credit Rules, 2004.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai dealt with the case where an appellant, M/s Aplab Ltd, was aggrieved by the demand for recovery of an amount wrongly restored as credit without proper authority and the imposition of a penalty under rule 15 of CENVAT Credit Rules, 2004. The appellant had paid an excess amount of money through their current account during a stock transfer to the regional office and later availed credit of this amount in their CENVAT account without following the proper procedure of applying for a refund under section 11B of the Central Excise Act, 1944. The lower authorities held this action to be contrary to law as the credit was taken without proper authorization and without receiving goods as inputs or utilizing input services against proper documents.

The appellant relied on the decisions of the Tribunal in two cases, Pushp Enterprises and Dew-Pond Engineers, to support their case. The Tribunal in the former case held that if duty is paid twice, excess duty paid is not a duty and can be re-credited. The latter case emphasized that double payment of excise duty is not required, and if payment is made twice on the same clearance, re-credit is justified. It was noted that the appellant had not taken suo moto credit but had made several requests in writing for re-credit, which were denied by the department without proper consideration. The Tribunal found that the appellant was entitled to re-credit of the duty paid from the CENVAT account, especially since they had paid in cash complying with the department's instructions.

Based on the decisions of the Tribunal and the facts of the case, the Tribunal concluded that the proceedings against the appellant were not sustainable. Therefore, the appeal was allowed, and the impugned order for recovery of the credit amount and penalty was set aside. The judgment highlighted the importance of following proper procedures and considering the circumstances of double payment before denying re-credit to the appellant.

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