correction in the CENVAT credit register-suo-moto credit refund-proceedings against the assessee for taking refund on their own

PJ/Case Laws/2011-12/1241

Case: S. Subrahmanyan & Co. versus Commissioner of C. Ex., Vadodara

Citation:2011 (268) E.L.T. 497 (Tri. – Ahmedabad)

Issue:- Whether a correction in the CENVAT credit register can be termed as suo-moto credit refund and proceedings can be initiated against the assessee for taking refund on their own?

Brief Facts: The appellant is engaged in the manufacture of Pre-stressed Mono-block Concrete Sleepers for Railways. The said goods were cleared by them to the Railways under the cover of thirty different invoices during the period 02.04.07 to 13.04.07, on payment of duty of Rs. 358052/- and VAT. However on realizing that the VAT was required to be charged @12.5% instead of 3%, they raised a supplementary invoice for the differential amount of VAT.
While doing so, they inadvertently again included the amount of excise duty already paid to the tune of Rs. 3,58,052/-. The same was debited in their cenvat register too. However on realizing that the duty already stands paid by them, they corrected the said entry before arriving at the correct figure of closing balance of cenvat credit in their cenvat register. Accordingly before filling a copy of the RG 23 A Part – II before the jurisdictional Central Excise Authorities, they corrected the figures of total “debits” and balance credit in the summary part of the cenvat register relating to the month of December, 2007.
By treating the said correction as a suo-motu credit, proceedings were initiated against the appellant by way of issuance of a show cause notice, alleging that instead of taking such refund on their own, they should have filed a refund application. The said show cause notice was dropped by the original adjudicating authority.
Hence, the Revenue filed this appeal.

Reasoning of the judgment: The Tribunal has also seen the supplementary invoice raised by the appellant and the extract of RG 23 A Part – II for the relevant period. Admittedly, the duty was debited two times in the said register. However instead of cutting and overwriting the said second time debit entry, the appellant debited the second time paid duty from the sum total of the credit available and arrived at the correct figure in their RG 23 A Part – II, at the end of the month itself.
Such corrected RG 23 A Part-II was submitted before the authorities alongwith the returns required to be filed by the assessee. As such it can be clearly seen that the said correction was only rectifying the clerical mistake, result of the arithmetical errors.
Where the entries are made incorrectly and there is no dispute about the same, correction of such entries is only arithmetical, not requiring any lis between the parties. To take a technical view that even in such cases where admitted wrong entries are made and are rectified immediately thereafter, an assessee is required to file refund application is to shake the assessee’s faith in the judicial system. Reliance by Commissioner Appeal on the larger Bench decision of the Tribunal in the case of BDH Industries Ltd. reported in 2008 (229) E.L.T. 364 (Tri. – LB) is not appropriate in as much as in the present case the mistake was rectified immediately in the same month, before filling the RG 23 A Part – II copy with the authorities, showing the correct quantum of modvat credit available with the appellant.

Decision: Appeal is allowed.

Comments:- As per the aforesaid judgment it can be viewed that correction to any clerical error found in any month can be corrected in the same month, provided that the net result shows accurate figures, without giving any intimation to the department in this regard. However such correction should be before producing the documents to the department and for any subsequent clerical error before any correction an intimation to department should be given.

Comments

PJ/Case Laws/2011-12/1241

Post a Comment

Query