Full Judgment
2. The relevant facts that arise for consideration that the respondents availed Modvat credit on the inputs. They cleared their finished product on payment of duty to the processors which were rejected by their processors and cleared back to the respondent on payment of duty.
The respondent having received the finished goods on payment of duty from their processors took the credit in their Modvat account. The lower authorities objected to such credit and directed the respondents to reverse the Modvat credit availed by them. The respondents did so subsequently on clear understanding of law recredited the amount debited by them, suo motu. In addition to this, the appellant also reversed the credit of excess sanctioned rebate claim. Subsequently, on direction from the Divisional office they paid the excess rebate sanctioned amount by TR-6 challan and recredited the amount reversed by them in RG23A account suo motu. The Revenue authorities issued the show cause notice against this action of recredit done by the respondent on the ground that they have availed the credit without producing any duty paying documents. The adjudicating authority confirmed the demand and imposed the penalty. On appeal the Commissioner (Appeals) set aside the same and allowed the appeal filed by the respondent. Hence, this appeal.
3. Learned D.R. submits that the respondent could not have availed the Modvat Credit in their RG-23, Part II without producing any valid duty paying document. It is his submission that the credit availed by the respondent on the invoices received back from their purchasers is itself is not correct and show cause notice was issued for denial of the credit. It is also his submission that the respondent should have filed the refund claim and got refund claim sanctioned from the authorities instead of availing Modvat credit. He relies upon the order of this Tribunal in the case of Medicamen Biotech Ltd. v. CCE, Jaipur-I as reported at 2003 (57) RLT 160(CEGAT-Del).
4. Learned advocate appearing on behalf of the respondent submits that in this case the authorities have not confirmed the demand of Modvat credit which was firstly sought to be denied to them and in the absence of any such confirmed demand the amount of credit availed by the respondent is correct. As regards the amount of excess rebate claim paid to the Revenue it is his submission that the department cannot claim what was paid twice.
5. Considered the submissions made at length by both sides and perused the record. I find that, as regards the amount of credit availed by the respondents in respect of denial of Modvat credit on the invoices, issue is squarely covered by the judgment and order of the Tribunal in the case of CCE, Surat v. Trinitra Texturisers Pvt. Ltd., as reported as 2004 (166) E.L.T. 384 (Tri.-Mumbai). I find in this case that the Revenue has not issued any show cause notice demanding the amount of credit which is sought to be denied to the respondent. In the absence of any such confirmation of amount, suo motu credit availed by the respondent cannot be defaulted. I find that the case law relied upon by the learned D.R. where the Modvat is not available to the appellants, initially and having debited the same, subsequent suo motu credit was denied to the assessee. In this case, the facts are totally different and is covered by the judgment in the case of Trinitra (supra).
6. As regards the suo-motu credit taken by the respondent on excess amount of rebate sanctioned to them I find that the respondent has paid the amount to the Government by reversing the amount from RG23A Part II. Subsequently, on the direction of the Divisional office the respondent paid the same amount through TR-6 challan. These facts are undisputed. Since they have paid the whole amount through TR-6 challan, there is nothing wrong in the respondent's availment suo motu credit of the amount paid twice to the Government. It is settled law that the revenue cannot retain any amount which is not due to them.
7. Accordingly, I do not find any merit in the appeal filed by the Revenue. Since cross-objection filed by the respondents is only in support of the order-in-appeal, the same is disposed of as being not pressed. Appeal filed by the Revenue is dismissed.