Issue- Second time duty was paid by the assessee. Instead of filing a refund they recreditted it on suo moto basis.
Department disputed the same and demanded duty on teh basis of ratio laid down by Larger Bench of this Tribunal in the case of BDH Industries Ltd.
Tribunal – Tribunal relied on the decision of Honourable High Court of Karnataka in the matter of Motorola India Pvt. Ltd. and distinguished and differed from BDH Industries Ltd.
It is pertinent to note that BDH Industries [ 2008 (229) ELT 364 (Tri-LB) held that suo moto credit or refund is not allowed .The said order is already under challenge before Hon’ble High Court of Bombay.
Further , the decision of Motorola India Pvt. Ltd. of Honourable High Court of Karnataka was not placed before Larger Bench in BDH Industries.
Tribunal accordingly held that
suo moto credit can be taken if duty is paid twice as excess duty paid is not a duty and same is deposit.
The entire order is produced herein below :
2015 (10) TMI 1651 – CESTAT DELHI
Other Citation: 2015 (322) E.L.T. 728 (Tri. – Del.)
M/s. Pushp Enterprises Versus Commissioner of Central Excise Jaipur I
Suo moto credit – whether the appellant have correctly taken suo moto credit of duty paid twice or not – Held that:- decisions of Sopariwala Exports Pvt. Ltd. (2013 (5) TMI 430 – CESTAT AHMEDABAD) wherein on the similar facts, this Tribunal had came to the conclusion that decision of Motorola India Pvt. Ltd. [2006 (7) TMI 223 – HIGH COURT OF KARNATAKA AT BANGALORE] was not placed before the Larger Bench of this Tribunal in the case of BDH Industries Ltd. (2008 (7) TMI 78 – CESTAT MUMBAI), therefore the decision of BDH Industries Ltd. (supra) cannot be relied upon and thereafter this Tribunal following the decision of Motorola India Pvt. Ltd. (supra) came to the conclusion that suo moto credit can be taken if duty is paid twice as excess duty paid is not a duty and same is deposit. In these circumstances, as the decision of Sopariwala Exports Pvt. Ltd. (supra) has been delivered by this Tribunal based upon the decision of Hon’ble High Court of Karnataka in the case of Motorola India Pvt. Ltd., therefore, I hold that the appellant has correctly taken suo moto credit of the duty paid twice. In these circumstances, impugned order is set aside. – Decided in favour of assessee.
No.- Excise Appeal No. 2411 of 2011 – Ex (SM)
Order No.- Final Order Nos. A/50324/2015-Ex(SM)
Dated.- February 3, 2015
Mr. Ashok Jindal, Member (Judicial), JJ.
For the Petitioner : Ms. Priyanka Goyal, Advocate
For the Respondent : Shri V P Batra, AR
ORDER
Per Ashok Jindal :
The appellant is in appeal against the impugned order wherein Cenvat credit taken suo moto by the appellant was denied. Therefore, duty is demanded along with interest and penalty of ₹ 50,000/- was also imposed.
2. The facts of the case are that the appellant is manufacturer of bearing component and supplying the same to M/s. SKF Ltd. They are having an agreement as the actual selling price of the goods were not known, therefore they were issued supplementary invoice. If the cost of raw material is increased, the appellant cleared the goods on payment of duty. Later on, they realized that the cost of raw material is increased therefore they raised 3 supplementary invoice on 3.11.08 and debited the duty thereon in their Cenvat credit account. The buyer of the goods did not accept the invoice issued by the appellant on the premise that as per the agreement the buyer has already paid excess duty to the appellant. In this scenario, the appellant took suo moto credit on the duty paid on supplementary invoice on 21.3.09 . During the course of audit, it was found that appellant has taken suo moto Cenvat credit in their Cenvat credit account which they were not entitled to as per Section 11B of the Central Excise Act,1944, A show cause notice was issued to the appellant to deny Cenvat credit taken suo moto and consequently to demand duty along with interest and for imposition of penalty. The matter was adjudicated and demand along with interest was confirmed and penalty of ₹ 50,000/- was also imposed. On appeal, the order of adjudication was confirmed by the first appellate authority. Against the said order appellant is before me.
3. Learned Counsel submits that it is admitted fact that they have paid the duty twice and the supplementary invoice issued by the appellant were not accepted by the buyers. Therefore, they had taken suo moto credit. She submits that although there is no provision to take suo moto credit under section 11B of the Act, it is only a procedural lapse and for that Cenvat credit cannot be denied as held by this Tribunal in the case of Sopariwala Exports Pvt. Ltd. [2013 (291) ELT 70 (Tri-Ahmd)] and S Subrahmanyan and Co. [2011 (268) ELT 497 (Tri-Ahmd)] . She also relied on the decision of Zandu Chemicals Ltd. vs Union of India [2015 (315) ELT 520 (Bom)] to say that for procedural requirement provisions are incapable of supplementary invoice and there is no requirement for strict compliance therewith if there is material on record which show procedural requirement is furnished, then inconsistency of compliance with procedure prescribed as per law is totally uncalled for and unjustified.
4. On the other hand, learned AR opposed the contention of the learned Counsel and submits that Larger Bench of this Tribunal in the case of BDH Industries [ 2008 (229) ELT 364 (Tri-LB) held that suo moto credit or refund is not allowed. Although the said order has been challenged before the Hon’ble High Court of Bombay, but fate of the same is not known. He further relied on the decision of Titwari Sugar Complex [2009 (247) ELT 519 (Tri-Del)] to deny the Cenvat credit. Learned AR also submits that once the amount is deposited with the Government of India, same cannot be taken as suo moto credit.
5. Heard the parties. Considered the submissions.
6. In this case, the short issue to be decided by me is that whether the appellant have correctly taken suo moto credit of duty paid twice or not. For that, the learned AR has reliled on the decision of the Larger Bench of this Tribunal in the case of BDH Industries (supra) which was followed by this Tribunal in the case of Titawi Sugar Complex (supra).
7. On the other hand, learned Counsel has relied on the decisions of Sopariwala Exports Pvt. Ltd. (supra) wherein on the similar facts, this Tribunal had came to the conclusion that decision of Motorola India Pvt. Ltd. [2006 (206) ELT 90 (Kar)] was not placed before the Larger Bench of this Tribunal in the case of BDH Industries Ltd. (supra), therefore the decision of BDH Industries Ltd. (supra) cannot be relied upon and thereafter this Tribunal following the decision of Motorola India Pvt. Ltd. (supra) came to the conclusion that suo moto credit can be taken if duty is paid twice as excess duty paid is not a duty and same is deposit. In these circumstances, as the decision of Sopariwala Exports Pvt. Ltd. (supra) has been delivered by this Tribunal based upon the decision of Hon’ble High Court of Karnataka in the case of Motorola India Pvt. Ltd., therefore, I hold that the appellant has correctly taken suo moto credit of the duty paid twice. In these circumstances, impugned order is set aside. Appeal is allowed with consequential relief, if any.
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