Nductotherm India Pvt Ltd & Anr. Vs Union of India (Gujarat High Court)
The petition challenged communications dated 13.01.2014 and 23.01.2014 issued by the Assistant Commissioner, Central Excise rejecting the petitioners’ request for re-credit of ₹1,68,99,531 and ₹2,05,33,931, and sought a direction to restore a total credit of ₹3,74,33,462 in the CENVAT register.
The petitioner company manufactures excisable goods including induction, melting and heating furnaces, welders and parts. Show cause notices dated 05.10.2006 proposed recovery under Section 11D of the Central Excise Act, 1944. By a common order dated 27.02.2007, the Commissioner confirmed the demands and imposed a consolidated penalty. The Tribunal allowed the assessee’s appeal, but this Court, by judgment dated 28.06.2012, allowed the Revenue’s tax appeal. The Court held that amounts collected as excise duty were required to be paid to the Central Government under Section 11D and that utilization of CENVAT credit for payment of such amount was impermissible. Following that judgment, the petitioner deposited ₹2,05,33,931 on 22.02.2013 and ₹1,68,99,531 on 14.11.2013 through the Personal Ledger Account (PLA).
After making the PLA payments, the petitioner requested re-credit of the corresponding amounts debited from its CENVAT account, stating that once the liability had been discharged through PLA, retention of the earlier CENVAT debit would result in double payment. The Department rejected the request on the ground that neither the Central Excise Act nor the Rules permitted suo motu re-credit and advised the petitioner to seek refund under Section 11B. The petitioner maintained that it was not seeking suo motu re-credit but restoration of the equivalent amount after payment through PLA, and contended that refund under Section 11B was not appropriate in the facts of the case. The Revenue argued that the only available remedy was a refund application under Section 11B and relied upon a Larger Bench decision of the CESTAT.
