Suo motu duty re-credit is valid for undisputed duplicate debits without invoking the statutory refund procedure.

Suo motu re-credit of duty paid twice is permissible where duplicate payment for the same clearances and the correctness of the re-credit are undisputed. The excess debit is treated as reversal of an accounting entry, not as a refund involving an outflow of funds; therefore, the refund procedure under Section 11B of the Central Excise Act does not apply. A demand based solely on failure to pursue that procedure lacks a valid basis where the Revenue does not dispute the substantive entitlement to re-credit. The assessee is consequently entitled to re-credit, and the show-cause notice and consequential demand are unsustainable.

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Issues: Whether an assessee may take suo motu re-credit of duty paid twice where the double payment and correctness of the re-credit are undisputed, without pursuing the refund procedure under Section 11B of the Central Excise Act, 1944.

Analysis: The excess duty arose from a duplicate debit for the same clearances. The assessee informed the audit officer and reversed the re-credit, but the Revenue did not identify any discrepancy in the double payment or establish that the re-credit was unjustified. In those circumstances, re-credit was treated as reversal of an accounting entry rather than a refund involving an outflow of funds; consequently, the refund mechanism was inapplicable. A demand founded solely on non-compliance with that procedure, without disputing the substantive entitlement to re-credit, lacked a valid basis.

Conclusion: The assessee was legally entitled to suo motu re-credit of the excess duty paid twice, and the show-cause notice and consequential demand were unsustainable.

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