Re-credit of Cenvat Account: Preventing Double Recovery Where Duty Paid Twice

1. Case Snapshot

• Case Name: Inductotherm India Pvt Ltd & Anr. vs Union of India Through Secretary & Anr.

• Citation: Not specifically provided (Gujarat High Court, 2026)

• High Court: High Court of Gujarat at Ahmedabad

• Bench: Hon'ble Mr. Justice A.S. Supehia and Hon'ble Ms. Justice Vaibhavi D. Nanavati

• Date of Judgment: June 24, 2026

• Area of Law: Excise Law – Cenvat Credit, Re-credit of Cenvat Account, Section 11D and Section 11B of Central Excise Act, 1944, Cenvat Credit Rules, 2004

2. Judgment in Brief

The Gujarat High Court allowed a writ petition challenging the rejection of an assessee's request for re-credit of Cenvat amount. The assessee had initially debited Cenvat credit towards excise duty, but this was held impermissible by the High Court in an earlier tax appeal. Consequently, the assessee paid the same duty again in cash from its Personal Ledger Account (PLA). The assessee then sought re-credit of the amount originally debited from the Cenvat account. The Department rejected this request, advising the assessee to file a refund application under Section 11B of the Act. The High Court held that the Department's approach was erroneous—since the assessee had already paid the duty in cash, the Department ought to have re-credited the amount to the Cenvat account to avoid double recovery. The Court directed the Department to re-credit Rs. 3,74,33,462/- to the assessee's electronic credit ledger under the GST regime within six weeks.

3. Relevant Facts

• The petitioner company manufactured excisable goods and was discharging excise duties as prescribed under the Central Excise Act, 1944.

• Show cause notices were issued in October 2006 proposing recovery of amounts under Section 11D of the Act on the ground that the assessee had paid excess duty and had utilized Cenvat credit impermissibly.

• The Commissioner confirmed the duty demand and imposed a penalty. The assessee appealed to the CESTAT, which allowed the appeal.

• The Revenue challenged the CESTAT order before the Gujarat High Court in Tax Appeal No. 1744 of 2007.

• By judgment dated June 28, 2012, the High Court allowed the Revenue's appeal, holding that the assessee had collected certain amounts from purc

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