Recredit of Cenvat duty held admissible where delayed rewarehousing proof was later produced and no objection was raised.

Recredit of duty paid in the Cenvat account for delayed rewarehousing certificates could not be denied merely because the assessee did not follow the exact refund procedure under Rule 156B of the Central Excise Rules, 1944. Rule 156B contemplated duty payment on failure to produce the certificate within time and refund once rewarehousing proof was later produced. Here, the duty was debited in the Cenvat account, the Department was informed, and recredit was sought without objection or recovery action under Section 11A. In these circumstances, the later objection that a refund claim should have been filed was rejected, and the credit was held to be admissible.

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Issues: Whether credit taken back in the Cenvat Account after payment of duty beyond the period prescribed for rewarehousing certificates could be denied on the ground that the assessee had not followed the exact procedure under Rule 156B of the Central Excise Rules, 1944 and should instead have filed a refund claim.

Analysis: Rule 156B required the consignor to pay duty on failure to receive the rewarehousing certificate within the stipulated period, and permitted refund where proof of rewarehousing was later produced. The duty in this case was paid through debit in the Cenvat Account, the Department was informed, and permission for recredit was sought. The Department did not object at the time, did not initiate recovery under Section 11A of the Central Excise Act, 1944, and effectively allowed the assessee to proceed in that manner. In these circumstances, the later objection that the assessee ought to have filed a refund claim was not accepted.

Conclusion: The denial of recredit was unsustainable and the assessee was entitled to retain the credit.

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