Cenvat Credit
CESTAT, Chennai Bench
J.K. Industries
v.
Commissioner of Central Excise Mysore
P.G. CHACKO, JUDICIAL MEMBER
AND P. KARTHIKEYAN, TECHNICAL MEMBER
MISC. ORDER NOS. 589 TO 599 OF 2007
E/CT Nos. 411 TO 419 of 2006 IN E/574 TO 582 of 2006
C/CT/396 of 2007 IN C/596 of 2000
E/MISC./430of 2007
July 5, 2007
Rule 14 of the Cenvat Credit
Rules, 2004 - Recovery of cenvat credit wrongly taken or erroneously refunded -
Lower authority directed for appropriation of an amount sanctioned as refund to
assessee towards pre-existing demands - On appeal, Commissioner (Appeals) set
aside lower authority’s direction, however, in respect of small amount
Commissioner (Appeals) upheld appropriation - Revenue filed stay application
against order of Commissioner (Appeals) - Tribunal rejected said application
and granted waiver of predeposit and stay of recovery in respect of amount
ordered to be appropriated - On appeal, Tribunal directed to reverse cenvat
credit taken on strength of Commissioner (Appeals) order on ground that
assessee had not disclosed fact that it had already taken re-credit of certain
amount in its cenvat account - Hence,
assessee filed instant application for recall of Tribunal’s order - Whether
since assessee withheld a crucial fact while obtaining relief of waiver and
stay, it did not conduct itself in a worthy manner on date on which stay order
was passed - Held, yes - Whether, therefore, it was not entitled to apply for
recall of Tribunal’s order - Held, yes [Para 3]
A refund was sanctioned to the assessee. The lower authority, however, directed for appropriation of an amount sanctioned as refund towards certain pre-existing demands. On appeal, the Commissioner (Appeals) set aside the lower authority’s direction. However, in respect of small amount, the Commissioner (Appeals) upheld the appropriation. Against the appropriation order, the assessee filed appeal. The Tribunal held that the assessee was entitled to get the entire amount of refund realized. In the meanwhile the revenue filed stay application. The Tribunal rejected the application and granted waiver of pre-deposit and stay of recovery in respect of amount ordered to be appropriated. On appeal, the Tribunal directed to reverse cenvat credit taken on the strength of order in appeal on the ground that when the stay order was passed, the assessee had not disclosed the fact that it had already taken re-credit of certain amount out of the amount sanctioned as refund in its Cenvat account. Hence, the assessee filed instant application for recall of the Tribunal’s order.
The assessee withheld a crucial fact while obtaining the relief of waiver and stay. That fact was that it had since taken re-credit of certain-amount in its Cenvat account on the strength of Order-in-Appeal. It had no justification for having taken credit on its own on the strength of an order passed by the Commissioner (Appeals), which was the subject-matter of the instant appeal. If it intended to do so, it ought to have done so with the leave of the Tribunal. Had the Bench come to know that it had already taken re-credit of the entire amount on the strength of the appellate Commissioner’s order, stay order would have been different as against it. Thus, it appeared that the assessee did not conduct itself in a worthy manner before the Bench on the date on which the stay order was passed. Its conduct had been grossly blameworthy, in moderate language. The factum of its having taken re-credit of the entire amount in CENVAT account prior to the date on which the stay order was passed was subsequently brought to Tribunal’s notice. There was no such contest even today. In those facts and circumstances, the assessee was not entitled to apply for recall of direction. It was also significant to note that, for giving effect to stay order, the Cenvat credit had to be reversed. The assessee could not claim undue advantage of dual benefits, viz., the benefit of waiver and stay of recovery and the self-availed benefit of Cenvat credit. In the circumstances, the application for recall of stay order was to be rejected. [Para 3]