It is common practice of the department to force the assessee (either manufacture or service provider) to pay duty / tax or to reverse cenvat credit by way of oral communication or written letter.

Moreover, assessee also fails to insist upon issuance of show cause notice for raising any demand or reversal of cenvat credit.

No an important question arises that where a person who has reversed cenvat credit merely on the basis of a letter from the superintendent, can reavail the credit if he finds that the reversal was wrong and he was justified in availing the credit?

The similar matter was heard by the CESTAT in recent case [reported in 2008 -TMI - 3510 - CESTAT, NEW DELHI] wherein the honorable tribunal has held that;

"It is surprising to note that the appellants, being one of the organized sector has reversed the Modvat credit on the mere letter of the Superintendent of Central Excise. They ought to have known that, during the relevant period, Modvat credit reversal, for any reason should be undertaken only if there is show cause and an adjudication to that effect. The appellants reversal of the Modvat credit on mere letter of the Superintendent. Central Excise, is in itself, an indication that, the appellants were not very sure of the eligibility of the credit to them on the said inputs which are used as descalents. Having acted blindly, by following the directions of the Superintendent, Central Excise the appellants cannot now cry foul, and avail the benefit of credit on the inputs, by suo motu recrediting the amount." 

[For full text of judgment visit -TMI - 3510 - CESTAT, New Delhi]

Reversal of Cenvat Credit based on a mere supervisory letter bars suo motu reavail absent show cause and adjudication. Reversal of Cenvat/Modvat credit executed solely on the basis of a superintendent's letter, without a show cause notice and adjudication, lacks the procedural foundation required for compelled reversal; informal departmental communications do not substitute for the statutory requirement of show cause and adjudication, and an assessee who reversed credit on such a letter cannot validly reavail credit by suo motu recrediting absent the formal process.