ORDER
P.G. Chacko, Member (J)
1. The appellants are manufacturers of textile machinery and spares thereof. They used to supply their products to 100% EOUs, without payment of duty, against CT-3 certificates. AR3As are raised at the time of clearance of the products and the same are returned to the appellants after rewarehousing. Some of these AR3As with rewarehousing certificates endorsed thereon are received by the appellants within the period of 90 days prescribed under Rule 156 B of the Central Excise Rules, 1944, and others are received after this period. In respect of the rewarehousing certificates received beyond 90 days, the appellants used to pay the applicable duty through debits in Cenvat Account and intimate the same to the Range Office. In one such instance, they intimated debit of an amount of Rs. 1,44,165/- in Cenvat Account to the Superintendent of Central Excise by letter dated 01.03.1999, wherein they also requested for permission to take recredit of the amount upon receipt of rewarehousing certificate. For a part (Rs.51,547/-) of this amount of Rs. 1,44,165/-, the appellants took such recredit later on, as they did not receive any response from the Department. Later on, the Department came out with a show-cause notice proposing to disallow the above credit. This proposal was contested. Both the original authority and the first appellate authority upheld the Department’s proposal and demanded the above amount of Rs. 51,547/- from the assessee. Hence this appeal.
2. Heard both sides. Ld. Counsel for the appellants submits that, though by mistake they had operated the Cenvat Account under Rule 156 B, it was not open to the Department to disallow the credit to them after having slept over their request for permission to take recredit. In this connection, Counsel refers to the Tribunal’s decision in Medicamen Biotech Ltd. v. Commissioner of Central Excise, Jaipur-I [2003 (156) E.L.T. 765 (Tri.-Del.)] and Indo-American Electricals Ltd. v. Commissioner of Central Excise, Bolpur [1999 (108) E.L .T. 797 (Tribunal)] and submits that the credit in question was not deniable to the appellants on the ground of non-grant of permission by the Department. Ld. SDR reiterates the findings of the Commissioner (Appeals) and submits that the case law cited by ld. Counsel does not squarely cover the issue in favour of the assessee.
3.After careful consideration of the submissions, I find that the lower authorities have relied on the provisions of Sub-rule 1 of Rule 156 B, which reads as under: –
“156B. Failure to receive rewarehousing certificate.- (1) In case the certificate of rewarehousing is not received back by the consignor within ninety days of the removal of the goods or such extended period as the Commissioner may allow to an assessee or class of assessees, the consignor shall pay the duty leviable on the consignment by a debit of his account-current.
Provided that where such duty has been paid and proof of rewarehousing is produced by the consignor to the satisfaction of the proper officer, such consignor shall, on making an application to the proper officer, be entitled to a refund of the duty so paid.”
The main part of the above Rule laid down that the consignor, like the present appellants, shall pay the duty by debit in his account-current i.e., Personal Ledger Account. The proviso laid down that, where such payment of duty was made and proof of rewarehousing was produced by the consignor to the satisfaction of the proper Officer, the consignor shall, on making an application to the proper officer, be entitled to refund of the duty so paid. In the instant ease, the payment of duty was made not from PLA but from Cenvat Account. Though this procedure was not in strict conformity with the Rule, the Department did not whisper against it. It is also noticed from the records that, after such payment of duty from Cenvat Account, the assessee intimated the same to the Range Officer and requested him for permission to take recredit of the amount in the same account upon receipt of rewarehousing certificates from the EOUs. Apparently, the Department slept over these applications and tacitly allowed the assessee to proceed in their own manner. As rightly pointed out by the ld. Counsel, if the Department were to adhere to the above Rule, they ought to have raised a demand of duty on the appellants under Section 11 A of the Central Excise Act, which they did not choose to do. Having accepted the duty payments effected through debits in Cenvat Account and having acquiesced in the assessee’s taking recredit of the amounts in the same account, the Department at a later stage cannot turn round and say that the proper course of action for the assessee was to file refund claim. The appellants’ case is apparently supported by the decision in Indo-American Electricals (Supra),wherein denial of credit on the limited ground of non-taking of permission was set aside by the Tribunal. Therefore, the direction issued by the lower authorities to the appellant to reverse the credits in question is set aside and this appeal is allowed.