REIL Electricals India Ltd. Vs Joint Secretary and ors. (Madras High Court)
Madras High Court allows rebate on exports where fraudulent entry in Credit was regularized by subsequent payment
Madras High Court in held that, owing to the squaring up of liability by Assessee along with interest to regularize its mistake of fraudulent entry made in CENVAT account, permits to grant rebate claim together with interest thereon is in accordance with law.
Facts
REIL Electricals India Ltd (“the Petitioner”) had made fraudulent credit of Rs.86,73,376/- in its CENVAT account and thereby debited the aforesaid sum as excise duty on the goods exported during the aforesaid period and thereafter filed rebate claim.
This mistake was detected by the Superintendent of Central Excise and hence rejected the rebate claim.
With a view to settle the dispute with the revenue (“the Respondent”), the Petitioner squared up the liability and paid the interest on fraudulent entry made in the CENVAT account. Thereafter, the Petitioner approached the Settlement Commission and the Settlement Commission settled the case of the Petitioner by its order dated Sep 27, 2010 by accepting the case of the Petitioner that the credit was wrongly taken.
Issues
Whether rebate on exports where fraudulent credit entry regularized by squaring up duty liability should be allowed?
Held
The Hon’ble Madras High Court in [W.P No. 13597 decided on June 11, 2021] held as under:
