Imposition of penalty for suo motu taking credit of excess duty paid

PJ/Case Laws/2011-12/1389

Case: UNION OF INDIA v/s ANNAPURNA MALLEBLES PVT. LTD.

Citation: 2011 (271) E.L.T. 349 (Chhattisgarh)

Issue:- Whether penalty can be imposed on ground that assessee have taken credit on their own and not with a simple intimation to Superintendent of Central Excise?

Brief Facts:- Respondent cleared their goods i.e. iron ore and steel castings, on payment of duty @ 20% ad valorem during the month of March, 1997, though rate of duty on the appellant's products was reduced from 20% to 18% from March, 1997. Upon noticing the error, Respondent took credit of excess duty paid on 26th March, 1997.

Department served show cause notice on respondent for recovery of credit so taken by them and proposed to impose penalty. The Adjudicating Authority confirmed the demand and imposed penalty on the ground that the appellant cannot take credit of the duty paid in excess on their own and instead should have filed refund claim under Section 11B of the Central Excise Act, 1944.

In appeal, the Commissioner (Appeals) upheld the order of the Adjudicating Authority. In further appeal, the Tribunal held that in case of availment of credit of the duty paid in excess is not correct, since the appellant is working under SRP system and the duty is cast upon them to discharge the correct duty liability if the appellant corrects the error in their record before the end of the month in question, there should not be any objection to that, and reflect the same in monthly Return R.T.-12. Relying upon the decision of the Division Bench of the Tribunal, it has been held that for duty paid excess by way of debiting in RG 23A, assessees can take credit of Modvat Credit with a simple intimation to the Superintendent of Central Excise.

Against the order of the Tribunal, Revenue is in appeal before the High Court.

Appellant’s Contention:- Revenue contended that in the instant case, the Tribunal was not justified in waiving the penalty imposed by the Adjudicating Authority and confirmed by the appellate Commissioner. Further it was submitted that since the excess duty paid by the assessee was passed by the assessee to the customer, waiving of penalty would amount to unjust enrichment of the assessee.

Reasoning of Judgment:- The Tribunal considered the Chartered Accountant’s certificate produced by the Respondent, according to which the assessee did not receive payment in excess of 18% duty, as also the certificate given by the assessee customer that they have not paid in excess of the duty @18% nor they have availed the credit in their Modvat record in excess of the duty @18%. It was held that no question of law arises in the appeal.

Decision:- Appeal dismissed.

Comments

PJ/Case Laws/2011-12/1389

Post a Comment

Query