Cenvat credit cannot be denied again in a second round once substantial relief was granted in remand proceedings.

Cenvat credit already substantially allowed in remand proceedings could not be denied again through a fresh show cause notice in a second round on the same issue. The Tribunal distinguished refund cases and held that the dispute concerned credit already under challenge, not a duty refund claim. Once the first round had resulted in substantial relief, Revenue's proper remedy was to appeal against that order rather than neutralise it by initiating fresh proceedings. The second round was therefore inconsistent with law, and the denial of credit, along with the associated demand, interest and penalty, was unsustainable.

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Issues: Whether Cenvat credit taken on the basis of an order-in-original passed in the assessee's favour could be denied in a second round of proceedings, and whether the demand, interest, and penalty were sustainable.

Analysis: The dispute turned on whether the credit reversal made earlier by the assessee and the subsequent allowance of the major portion of credit in remand proceedings could be ignored by issuing a fresh show cause notice. The Tribunal distinguished the cited precedent on refunds, holding that the present case did not involve a duty refund claim but denial of credit already under dispute. It found that once the first round of proceedings had culminated in substantial grant of credit, Revenue could not neutralise that relief by initiating a second set of proceedings on the same issue; if dissatisfied, the proper course was to challenge the first order in appeal. The second round was therefore inconsistent with law.

Conclusion: The denial of credit was unsustainable, and the demand, interest, and penalty could not be sustained. The appeal was allowed in favour of the assessee.

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