Whether after reversal of CENVAT, can it be taken again or refund claim is to be filed?

PJ/Case Laws/2011-12/1424

Case:Automotive Metal Stampings Pvt. Ltd. V/c Commr. Of C. Ex., Pune-I

Citation:2011 (272) E.L.T. 603 (Tri.-Mumbai)

Issue: - After reversal, cenvat credit cannot again be taken suo motu but refund claim is to be filed.

Brief Facts: - Appellant-assessee reversed the Cenvat credit under protest as per directions of Department. Department did not issue any Show Cause Notice for one year after reversal and appellant suo-motu took back the credit reversed and intimated the department about the same.

Thereafter, the department issued show cause notice on the ground that the appellants should have actually filed refund claim and should not have taken back the credit suo motu. The matter is before the Tribunal and stay application is also filed.

Appellant’s Contention: -Appellant submitted that they were forced to reverse the Cenvat Credit availed by them. Since no show cause notice was issued till date, there was nothing wrong in availment of credit. The appellant admitted that they were not able to show a contrary decision on the same issue. Appellant further submitted that the appeal filed against the decision of BDH Industries Ltd has been admitted by the High court of Bombay. It was also submitted that the decision of larger bench in the case of BDH Industries Ltd could not have been made applicable to them since in this case the reversal of credit itself was wrong and was made because of the force of the department.

Appellant further submitted that no show cause notice has been issued even after five year and this fact shows that the department has no case whatsoever. In these circumstances, the amount deposited by the appellants could only be a deposit and not a duty and, therefore, the procedure followed by the appellants was correct.

Reasoning of Judgment: -The Tribunal considered that the appellants after following the correct procedure subsequently changed their mind for reasons best known to them. In view of the decision taken by the Larger Bench in BDH Industries Ltd case, the reasoning for reversal of CENVAT Credit is not relevant. The Re-credit has to be taken by filing refund claim only. The position does not change depending on the ground for taking re-credit. Since the decision does not differentiate between the grounds for reversal, the Tribunal further stated that they were bound to follow the decision of the Larger Bench and therefore hold that the appellants have not been able to make any prima facie case.

The Tribunal held that in view of the decision of the Larger Bench, nothing more is left to be decided in this case. The appellant has requested whether the appellants could reverse the credit taken by them suo motu with interest and file a refund claim which can be considered by the department as fast as possible. The Tribunal directed the appellants to reverse the credit with interest and file refund claim. The Tribunal also directed the departmental officer to sanction the refund within a period of one month from the date of filing the claim since in this case the question of unjust enrichment does not arise and after reversal no show cause notice has been issued.

The Tribunal further considered that reversal has been made under protest therefore refund claim cannot be rejected on the ground of limitation. In view of the above discussion the stay petition is allowed and the impugned order is set aside as far as penalty is concerned.

Decision: - Appeal disposed of accordingly.

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PJ/Case Laws/2011-12/1424

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