2008 (7) TMI 167

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....f are that appellants were found to have availed credit of Rs. 98,859/- on 8 invoices. They had debited the whole amount on being pointed out in December, 2005 but the very next day, they reversed the credit as wrongly debited. Thereafter they reversed an amount of Rs. 30,363/- in respect of 5 invoices admitting that they were not eligible to take the credit. Similarly they had also reversed the credit of Rs. 23,916/- the next day since it was pointed by the audit that these rejected/returned goods were sold as scrap and therefore was not used in the manufacture and the process they underwent cannot be considered to be manufacture. Another amount of Rs. 17,782/- was also found to be admissible on verification even though it was reversed imm....

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....t reversal of debit by way of credit entry is in order and it is only in the nature of arithmetical adjustment. 1. M/s. Visakhapatnam Steel Plant v. CCE, Vizag. [2002 (149) E.L.T. 708 (Tri. - Bang.) ]. 2. M/s. Silcal Metallurgic Ltd. v. CCE, Cochin [2002 (149) E.L.T. 711 (Tri. - Bang.) ]. 3. M/s. Gujarat Alkalies & Chemicals Ltd. v. CCE, Vadodara-II [2005 (190) E.L.T. 406 (Tri. - Mum.) ]. 4. M/s. Bellary Steels & Alloys Ltd. v. CCE, Belgaum [2003 (157) E.L.T. 324 (Tri. - Bang.) ]. 5. CCE, Hyderabad v. Sab-Nife Power Systems Ltd. [2003 (157) E.L.T. 337 (Tri. - Bang.) ] 6. M/s. Veena Diescasters & Engrs. P. Ltd. v. CCE, Thane-I [2006 (203) E.L.T. 133 (Tribunal) = 2007 (78) RLT 114 (CESTAT - Mum.)]. 4. I find that the judgments cited by....

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....of modvat credit, refund claim has to be  made and suo-motu reversal of debit entry is not permissible. In fact the two cases cited by me above have been referred to in the above decision and both have been distinguished. Therefore what is to be examined is whether what was done by the assessee in a particular case is a mere adjustment of the credit or the transaction amounted to payment of duty. Therefore, I hold that Commissioner (Appeals)' reliance on the order of the Tribunal is misplaced. Coming to the present case apparently the reversal of the amount Rs. 1,31,557/- in the RG23A Part-II register was made without any verification and on the basis of the direction of the officers who conducted the audit. Moreover, the reversal was ....