Cenvat credit reversal cannot be demanded twice from registered dealers when the amount was already debited in records.

Rule 12 of the Cenvat Credit Rules, 2002 was analysed as a provision aimed at wrongful availment or utilisation of credit by manufacturers, not at registered dealers who were not manufacturers. Where the dealers' invoices already reflected debit of the relevant amount in the prescribed records, the amount was treated as having been paid, and a further demand for the same sum was not sustainable. On that basis, the demand was held not maintainable against the appellants and the impugned orders were set aside.

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Issues: Whether Rule 12 of the Cenvat Credit Rules, 2002 could be invoked to demand reversal of Cenvat credit from registered dealers who were not manufacturers, and whether the demand could survive when the credit had already been debited in the dealers' records at the time of invoicing.

Analysis: The appellants were registered dealers and not manufacturers. The demand was sought to be raised under Rule 12 of the Cenvat Credit Rules, 2002, a provision intended to deal with wrongful availment or utilisation of credit by manufacturers. On the facts, the invoices issued by the appellants showed debit of the relevant amount in the prescribed records, so the amount had already stood paid to the Government. In these circumstances, the rule could not be pressed into service against traders, and a second demand for the same amount was not sustainable.

Conclusion: The demand was not maintainable against the appellants, and the impugned orders were set aside in favour of the appellants.

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