Order Date – 19 January 2023

Parties: M/s Mideast Integrated Steels Ltd. Vs Commissioner of CGST & Excise, Bhubaneswar

Facts –

• The Appellant, M/s Mideast Integrated Steels Ltd., was issued an audit Memo to pay service tax on “Renting of Immovable Property Service” provided during the Financial Year 2007-2008.
• The Appellant on the same day paid suo motu by debit to Cenvat Account. During their subsequent Audit, the Auditors pointed out that the payment of service tax made by debit to Cenvat Account was irregular and the Appellant already paid it from current account with interest. Accordingly they revised the same amount in Cenvat Account on 31.03.2010
• Show-cause notice dated 21st March 2014 was issued for recovery of the said purported in admissible input service credit alleged on the aforesaid erroneous premises.

Issue –

• Whether the appellant can reverse such amount from Cenvat Account?

Order –

• The Tribunal observed that Appellant had discharged the duty burden from their PLA Account and as such, there is no dispute about the same. With such payment of duty out of PLA, they have reversed the debit entry made by them in their Credit Account which was used for payment of duty earlier.
• It was held that once the duty has been paid in cash, earlier payments made through Cenvat Account are liable to be re-credited in the said Account and no objection that such re-credit was not on the basis of any eligible document can be adopted by the Revenue.
• The Tribunal relied on the judgment of the Hon’ble High Court of Madras in the case of ICMC Corporation Limited vs. CESTAT, Chennai reported in 2014 (302) ELT 45 (Mad.) wherein the Hon’ble High Court held that suo motu credit of Cenvat reversed earlier involved only an account entry reversal and in the process, no outflow of funds from the assesse and accordingly, filing of refund claim under Section 11B of the Central Excise Act, 1944, is not required.
• Hence the appeal is allowed.