CENTRAL EXCISE ACT, 1944

Section 11B

Refund of Cenvat credit - Allowability - Wrong reversal of credit whether amounts to payment of duty -

Assessee was engaged in manufacture of air compressors. It made supplies to Navy which are exempted from payment of duty in terms of Notification No. 64/95-CE, dated 16-3-1995. Assessee made debit in its cenvat credit account as required under rule 6 (3A) on premise that common credit was availed on goods and it had to reverse 6% of value of goods supplied to Navy being exempted goods. Later, assessee realized that since no manufacturing activity took place on goods supplied to Navy, assessee was not liable to reverse credit. It filed a refund claim, which got rejected on ground of time limitation and unjust enrichment. Held: The question arose as to whether wrong reversal of amount in the Cenvat credit account by assessee would amount to payment of duty to the Government. Tribunal in case of Commissioner of Central Excise & Service Tax v. SNJ Sugars and Products Ltd. 2018 TaxPub(EX) 869, held that such reversal does not amount to duty and the provisions of section 11B of Central Excise Act, 1944 is not attracted. Thus, rejection of refund on the ground of time bar was not sustainable. Commissioner (Appeals) remanded to look into the issue of unjust enrichment. Assessee had to establish that duty burden was not passed on to another in remand proceedings.

Followed:Commissioner of Central Excise & Service Tax, Tirupati v. M/s. SNJ Sugars and Products Ltd. 2018 (362) E.L.T. 492 (Tri-Hyd.) : 2018 TaxPub(EX) 869 (Tri-Hyd.)

REFERRED : M/s. 3E Infotech v. Customs, Excise & Service Tax Appellate Tribunal, Commissioner of Central Excise (Appeals-I) 2018 (18) G.S.T.L. 410 (Mad.) : 2018 TaxPub(ST) 1317 (Mad-HC)

FAVOUR : Partly in assessee's favour

A.Y. :

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