https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=764868 https://www.taxtmi.com/caselaws?id=764868 100% EOU - entitlement to take suo-moto re-credit of the Cenvat credit that was earlier reversed, without following the refund procedure under Section 11B of the Central Excise Act, 1944 - HELD THAT:- Indisputably it is also evidence from the records that the cenvat credit taken and utilized by the appellant, stands fully recouped, consequent to the reversal entries and payments made, including interest thereon. By such reversal and payments, it is evident that the effect of such reversal is entirely borne by the appellant and the original credit taken stands expunged. Thereafter, as intimated by the appellant when it takes credit of the proportionate cenvat credit, out of the amount of cenvat credit on licit input services which it even otherwise was originally entitled to take credit of, there is no illegality attached to the said taking of credit. Moreover, such taking of credit stands reported in the ER-2 return filed by the appellant. This Tribunal is of the view that in such circumstances there is no necessity to put the appellant through the rigors of seeking refund by following the procedures of section 11B of the Act. The reliance placed by the adjudicating authority on the decision of Tribunal larger bench in BDH Industries [ 2008 (7) TMI 78 - CESTAT MUMBAI-LB] is misplaced. This tribunal in Sopariwala Exports Pvt Ltd v CCE, Vadodara [ 2013 (5) TMI 430 - CESTAT AHMEDABAD] has already held that when the High Court decision holds the field the larger bench decision does not have binding effect. It is also pertinent that the jurisdictional officer has not raised any objection to the appellant s intimation of its intent to avail the credit being reversed at a later date, when communicated vide appellant s letter dated 21.07.2009. That apart, the appellant has also stated that they had intimated the availment of the credit in the ER 2 returns filed and further that to an audit objection against the availment during March 2011, they had, vide letter dated 27.04.2011, replied that the objection is unsustainable - Even otherwise, when the appellant has already communicated its intent to take the credit reversed at a later date upon completion of the work and when it reflects the credit taken in the ER-2 returns, the appellant cannot be held to have made any wilful mis-statement or suppression of facts with intent to evade payment of duty warranting invoking of the extended period of limitation. Therefore, given that the SCN in this case is dated 11.09.2013 and has been issued invoking the extended period of limitation for making demand of the credit taken in the month of December 2009, it is evidently beyond the normal period stipulated in Section 11A and thus the demand is also barred by limitation. Conclusion - Suo-moto re-credit is permissible when the original credit is eligible, and the reversal is merely an accounting entry. The extended period of limitation cannot be invoked without evidence of willful misstatement or suppression. The demand made of Rs.40,64,459/- under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 and the demand of appropriate interest thereon as well as the penalties imposed under the impugned order in original, are untenable. Appeal allowed. Case-Laws Central Excise Mon, 20 Jan 2025 00:00:00 +0530