TaxTMI 
TaxTMI 
2026 (8) TMI 1699
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....ecified for different commodity groups as per table in Para 2 of the notification. Para 2C of this notification gives them option subject to several conditions, to take credit of monthly refundable amount calculated in the manner as specified in Para 2 of the notification, in the account current, instead of disbursement of cash refund as per Para 2B. 1.1 It was noticed during audit that the appellant had taken suo moto credit of Rs. 54,00,034 in account current in April, 2010 by endorsing as "Re-credit (08-09 annual)" in violation of the provisions of above notification. A show cause notice dated 29.02.2016 was issued to the appellant proposing recovery of above credit under Section 11A read with Notification No. 39/2001 along with interest under Section 11AA and penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules 2002. During adjudication, Joint Commissioner vide order dated 25.01.2018 confirmed the recovery of credit of Rs. 54,00,034/- along with interest and also imposed equal penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002. 1.2 Aggrieved with this order, appellant filed appeal before Commi....
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.... which was to be granted only by way of refund. This interpretation will make para 2.2 of the Notification redundant as the refund of annual differential amount in terms of this Para will not be available where a unit opts for re-credit facility in terms of Para 2C of the notification. e) They submitted the detailed working of annual differential amount in terms of Para 2.2 of the notification with the Assistant/Deputy Commissioner of Central Excise on 11.05.2009 which was to be decided in a time bound manner, but same is still pending for disposal. By submitting the said application, they had complied with the provisions of the notification and it was on the department to have decided the eligible amount of refund. f) They had intimated the Jurisdictional Assistant Commissioner about recredit of differential amount vide letter dated 11.05.2009 and hence, there cannot be any allegation of collusion or wilful mis-statement or suppression of facts or fraud. Therefore, no penalty is imposable on them under Section 11AC/Rule 25 of the Central Excise Rules, 2002. They rely on the following decisions: - (i) Saurashtra Cement Ltd reported in 2010 (260) ELT 71....
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....ion were violated which was noticed by the department only during audit and thus, show cause notice has correctly been issued in this case for recovery of credit after a period of 5 years from the date of taking credit 4.1 He placed reliance on the decision of this Tribunal in the case of Garden Silk Mills Ltd Vs. C.C.E, Surat reported in 2017 (350) ELT 302(Tri. Ahmd.) to plead that refund by way of suo moto credit of duty debited from Cenvat account was not permissible. He also relies on the decision of Larger Bench of the Tribunal in the case of BDH Industries Ltd Vs. Commissioner of Central Excise (Appeals), Mumbai-I reported in 2008 (229) ELT 364 which held that there is no provision under the Central Excise Act, 1944 and the Rules made thereunder, to allow suo moto taking of credit or refund without sanction by the proper officer. In a different context which involved refund of differential duty due to price variation, CESTAT Delhi in the case of Krishna Electrical Industries Ltd Vs. CCE, Indore reported in 2017 (352) ELT 67 held that Central Excise law provides procedure for claiming refund of Central Excise duty paid in excess subject to various conditions prescribed unde....
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.... All goods 34 Any goods 6. 39 All goods 26 Any goods 7. 40 Tyre, tubes and flaps 41 Any goods 8. 72 or73 All goods 39 Any goods, other than iron ore 9. 74 All goods 15 Any goods 10 76 All goods 36 Any goods 11 85 Electric motors and generators, electric generating sets and parts thereof 31 Any goods ^4[12 25 Cement 75 Lime stone and gypsum 12A 25 Cement clinker 75 Lime stone] Cocoa beans ^5[13 17 or 35 Modified starch or Glucose 75 Maize, maize starch or tapioca starch] 14. 18 Cocoa butter or powder 75 Cocoa beans 15. 72 or 73 Iron and steel products 75 Iron ore ^6[15A 29 or 38 Fatty acids or Glycerine 75 Crude palm kernel, coconut, mustard or rapeseed oil 15B 72 Ferro alloys, namely, ferro chrome, ferro manganese or silico manganese 75 Chrome ore or manganese ore] 16. Any chapter Goods other than those mentioned above in S.Nos. 1 to 15 36 Any goods Provided that where the duty payable on value addition exceeds the duty paid by the manufacturer on ....
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....ercise his option in writing for availing such option before effecting the first clearance in any financial year and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year, (d) the manufacturer shall submit a statement of the total duty payable as well as the duty paid by utilization of CENVAT credit or otherwise and the credit taken as per clause (a), on each category of goods manufactured and cleared under the notification and specified in the said Table, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 15th of the month in which the credit has been so taken; (e) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall determine the amount correctly refundable to the manufacturer and intimate to the manufacturer by the 15th day of the next month to the month in which the statement under clause (d) has been submitted. In case the credit taken by the manufacturer is in excess of the amount determi....
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....the proportion in which the material or components are used in the production or manufacture of goods: Provided that the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, may, if he is satisfied that the manufacturer was prevented by sufficient cause from making the application within the aforesaid time, allow such manufacturer to make the application within a further period of thirty days; Provided further that the manufacturer supports his claim for a special rate with a certificate from his statutory Auditor containing a calculation of value addition in the case of goods for which a claim is made, based on the audited balance sheet of the unit for the preceding financial year; (1A).................... (2) On receipt of the application referred to in sub-paragraph (1), the Commissioner of Central Excise or Commissioner of Customs and Central Excise, as the case may be, after making or causing to be made such inquiry as he deems fit, shall fix the special rate within a period of three months of such application (3) Where the manufacturer desires that he may be granted refund provisiona....
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....anufactured and cleared under this notification with effect from the 1st day of April of the year in which the application referred to at sub-paragraph (1) was filed with the Commissioner of Central Excise or Commissioner of Central Excise and Customs, as the case may be Provided that in cases where the application referred to in subparagraph (1) had already been filed prior to the 10th day of June, 2008, the manufacturer shall be entitled to refund at the special rate fixed under sub-paragraph (2) in respect of all clearances of excisable good manufacturer and cleared under this notification with effect from the 1st day of April, 2008 ^8 [(6) Where a special rate is fixed under sub-paragraph (2), the refund payable in a month shall be equivalent to the amount calculated as a percentage of the total duty payable on such excisable goods, at the rate so fixed: Provided that the refund shall not exceed the amount of duty paid on such goods, other than by utilization of CENVAT credit." ^9[2.2(1) In case the total amount of refund paid or payable to a manufacturer in respect of goods cleared from a unit during a financial year is less than the total d....
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....here total amount of refund paid or payable to the manufacturer in respect of goods cleared from the unit during a financial year is less than the total duty paid by him on the said goods, other than from Cenvat Credit, the differential duty, if any, shall be refunded to him subject to the condition that the total refund made to him during the year, including the aforesaid differential amount does not exceed the total duty payable on value addition whether at the rate specified in the table or at the special rate fixed by the Commissioner. On such application, the Assistant Commissioner shall refund the differential amount, if any, to the manufacturer not later than 15th day of May in the subsequent year. 5.3 We find that the lower authorities have confirmed recovery of credit under Section 11A(4) along with interest under Section 11AA of the Central Excise Act, 1944, mainly on the ground that the Notification No. 39/2001-CE as amended, does not prescribe annual adjustment in refund amount on suo moto basis. He also imposed penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002 for violation of the conditions of the notifications. 5.4 On limitation, we....
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....s on date". When this Bench vide order dated 18.12.2025 sought for categorical report on disposal of pending application, the Commissionerate vide letter dated 25.02.2026 reported as under:- "4. It has been reported by CGST Bhuj Division having jurisdiction over the issue that it cannot be categorically stated whether the refund claim of Rs.54,00,034/- filed by M/s Anchor Electricals Pvt. Ltd. is pending with Bhuj Division or has been disposed of." Above report does not speak well of the functioning of the Division Office. Instead of timely disposal of refund application submitted by the appellant, the division Assistant Commissioner kept quiet for several years and when the issue was raised by audit, they proceeded to issue show cause notice after 6 years to save themselves. The Jurisdictional Chief Commissioner should enquire in to the matter to ascertain reasons for inaction on the part of departmental officers and take corrective measures. 5.6 We find that the appellant submitted statement for annual differential duty for financial year 2008-09 on 11.05.2009 with hope to get the decision/permission of the Jurisdictional Assistant Commissioner. When no decision....