Hon'ble Judges/Coram:
S.K. Mohanty, Member (J) and Sanjiv Srivastava

ORDER

S.K. Mohanty, Member (J)

1. Brief facts of the case are that the appellants are engaged in the manufacture of transformers, falling under Chapter Heading No. 8504 of the Schedule to Central Excise Tariff Act, 1985. For smooth functioning of the said final product, the appellants use transformer oil, purchased from third parties. During the disputed period, the appellants had entered into contract with M/s. Power Grid Corporation of India Ltd., West Bengal for supply and installation of the transformers at the customer's site. As per the contract, the appellants were required to dispatch transformers along with transformer oil. For supply of the transformers, the appellants have computed and paid the central excise duty on the assessable value of both transformer and transformer oil. But, the transformer oil was not supplied along with the transformers. The said oil was subsequently supplied on payment of appropriate central excise duty. The appellants realized their mistake that duty liability had been discharged twice on transformer oil. Accordingly, they had taken credit of Central Excise duty paid on such oil in their Cenvat account. Taking of suo motto credit by the appellants was disputed by the department and show cause proceedings were initiated, seeking for recovery of the wrongly availed Cenvat Credit along with interest and for imposition of penalty. The show cause notice dated 04.10.2007 was adjudicated vide order dated 02.02.2009, wherein the proposals made therein were dropped, on the ground that the appellants indeed had made payment of excise duty on two occasions and taking of credit based on appellants' own invoice in a technical contravention. Against the adjudication order dated 02.02.2009, Revenue has filed appeal before the Learned Commissioner (Appeals), which was disposed of vide the impugned order dated 16.08.2010, by setting aside the adjudication order and in allowing the appeal in favour of Revenue. The Learned Commissioner (Appeals) has held that suo motto credit cannot be taken without applying for refund in terms of Section 11B of the Central Excise Act, 1944. He has relied upon the judgment of Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. Vs. Union of India-MANU/SC/1203/1997 : 1997 (89) ELT 247 (SC), Larger Bench decision of this Tribunal in the case of BDH Industries Ltd.- 2008 (229) ELT 364 (Tri.-LB) and the decision of Double Member Bench of the Tribunal in the case of Comfit Sanitary Napkins (I) Pvt. Ltd. - MANU/CB/0410/2004 : 2004 (174) ELT 220 (Tri.). Feeling aggrieved with the impugned order dated 16.08.2010, the appellants have preferred this appeal before the Tribunal.

2. The Learned Advocate appearing for the appellants submitted that since the appellants have inadvertently paid duty twice on transformer oil, taking of suo motto credit in the Cenvat account is proper and justified. In this context, he has relied upon the judgment of Hon'ble Karnataka High Court in the case of Commissioner of C.Ex., Bangalore - III Vs. Motorola India Pvt. Ltd. - MANU/KA/8619/2006 : 2006 (206) ELT 90 (Kar.). Further, he has submitted that in view of the said judgment of Hon'ble Karnataka High Court, the decision of Tribunal in case of Comfit Sanitary Napkins (supra) gets vitiated and as such, reliance placed on the said decision in the impugned order for allowing the appeal of Revenue is not sustainable. With regard to applicability of the ratio of judgment in the case of BDH Industries Ltd. (supra) to the facts of the present case, he has submitted that an appeal filed against the said judgment has been admitted by the H........