Debit entry of duty made twice – second entry corrected in the same month in RG 23 A Part-II – whether such correction amount to suo motu taking refund or merely recifying clerical mistake.

PJ/Case Laws/2011-12/1276

Case: S. SUBHRAMANYAM & CO. v/s COMMISSIONER of C. Ex., VADODARA

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

Issue:- Debit entry of duty made twice – second entry corrected in the same month in RG 23 A Part-II – whether such correction amount to suo motu taking refund or merely recifying clerical mistake.

Brief Facts:- Appellants are 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 2-4-07 to 13-4-07, on payment of duty of Rs. 3,58,052/- and VAT @ 3%. However on realizing that VAT was required if charged @ 12.5% instead of 3%, they raised a supplementary invoice No. 655 dated 14-2-05 for 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 on 31-12-07 vide entry No. 474. However on realizing that duty was already 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 filing a copy of the RG 23A 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 dated 29-8-08 alleging that instead of taking such refund on their own, they should have filed a refund application.

The show cause notice was dropped by the Adjudicating Authority. Revenue filed appeal which was accepted by Commissioner (Appeals).

Hence, appellant is before the Tribunal.

Reasoning of the Judgment:-The Tribunal perusedthe supplementary invoice raised by appellant and the extract of RG 23A 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, appellant debited the second time paid duty from the sum total of the credit available and arrived at the correct figure in their RG 23A Part-II, at the end of the month itself. Such corrected RG 23A Part-II was submitted before the authorities along with 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. It was held that where the entries are made incorrectly and there is no dispute about the same, correction of such entries is only arithmetical, not requiring any /is between the parties.

It was held that 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 (Appeals) on the Larger Bench decision of the Tribunal in the case of BDH Industries Ltd. [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 filing the RG 23A Part-II copy with the authorities, showing the correct quantum of modvat credit available with the appellant. Impugned order set aside.

Decision:- Appeal allowed.

Comments: - If any rectification is done in the credit register i.e RG 23 A PART II, it is to be done only after intimating the department and following the procedure, in the given case, since duty liability was not affected as the correction was done in the same month, the decision was given in the favour of assessee.

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PJ/Case Laws/2011-12/1276

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