Pradeep Jain - Chartered Accountant

PJ/Case Laws/2009-10/22

Case Laws

Central Excise Section:

Case: - CCE, Mysore v/s Nestle India Ltd

Citation: - 2009 (94) RLT 702 (CESTAT-Ban)

Issue: - Whether valuation under Section 4A or under Section 4 would be applicable if goods are cleared in bulk to the Defence/police without affixing retail price on them?

Brief Facts: - Respondent-assessee were supplying instant coffee packed in unit container of 200 and 500 ms to Indian Army/Indo Tibetan Border Police (ITBP) for consumption. They were assessing the said goods under Section 4 of the Central Excise Act, 1944 on the ground that they were clearing the goods without printing MRP on the products when supplied to Indian Army/ITBP. On enquiry, the Assistant Controller from Metrology Department, Government of Karnataka vide letter informed that there was no exemption from affixing MRP on packaged commodities supplied to IA/ITBP or to any institution coming under Central Govt, Defence /Home Ministry. The Lower Authorities felt that the assessee were not covered under exemption category specified under Rule 34 of the Standards of Weights & Measures (Packaged Commodities) Rules, 1977. It was held that the assessee were required to adopt valuation of their goods under Section 4A of the Central Excise Act. It was also held that the assessee have not disclosed the sales concerning the issue of supplies made to such institution in their monthly returns and thereby had suppressed the fact to the department with an intention to evade payment of higher Central Excise duty. Accordingly, differential duty was demanded from respondent by issuing show cause notice invoking proviso to Section 11A and sought penalties under various sections.

The Commissioner however dropped the show cause notice by holding that the department was aware about the transactions undertaken by the respondent. That the Rule 6 (1) (f) was not applicable to respondent’s case as the said Rule applied only in respect of commodities which are intended for retail sale and not in respect of commodities which are not for sale. That he letter issued by the Legal Metrology Department was of no relevance. That the show cause notice was issued on 01.12.06 for the period February, 2004 to September, 2006 and therefore was clearly time barred. Revenue is in appeal against the said order.

Appellant’s Contentions: - Revenue submitted that the conditions/ requirements to be fulfilled to be eligible for exemption from affixing the retail sale price is to be decided in terms of the provisions of Rule 34 of the Standards of Weights and Measures Act, 1976. No provisions exist in Central Excise Act to determine as to whether any item is exempted from affixing the retail sale price. The Board Circular No. 625/16/2002-CX dated 28.02.02 relied upon by the Commissioner listed the instances where a dispute can arise and goes on to say that Metrology Department under the State Government has to be contacted for clarification when any dispute arises. The metrology department has clear cut clarified that there was no exemption from affixing MRP on packaged commodities supplied to IA/ITBP or to any institution coming under Central Govt, Defence /Home Ministry. The said Circular does not give any decision/opinion on applicability of Section 4A on the various instances/examples quoted, where a dispute arises.

It was contended that bulk sale is not a factor to decide the applicability of Section 4A by relying upon the Circular No. 843/1/2007-CX dated 17.01.07. Reliance was placed on the judgments given in CCE, Madras v/s MRF and Kwality Biscuits Pvt Ltd v/s CCE (Appeals-II) Bangalore. Reliance was also placed on the Apex Court judgment reported in 2007-TIOL-150-SC-CX. It was further argued that just because the items are sold in bulk will not negate the applicability of the provisions of SWM Act to affix RSP and hence, it is very clear that the fact of packing in bulk by the manufacturer is not a criterion to decide the applicability of the SWM Act.

Relying upon the definition of sale or purchase under Section 2 (h) of the Central Excise Act, 1944 it was contended that once the ownership of the goods is transferred to the buyer of the goods, the intended use of the goods must not be a factor to determine the manner of assessment of the goods for duty under Section 4A. It is further submitted that the assessee had never brought to the notice of the department that they would be valuing the goods under Section 4 instead of Section 4A as correctly applicable. Thus, there is suppression of fact and the extended period of limitation under proviso to Section 11A (1) is applicable. Reliance was placed on the decision given in Mehar Shoes [2004 (64) RLT 526 (CESTAT-Kol)] and in Jayanti Food Processing Pvt Ltd v/s Commr [2007 (82) RLT 239 (SC)].

Reasoning of Judgment: - The Tribunal found that the respondent has been clearly marking the goods supplied to the Ministry of Defence as “for Defence Services only” or “for ITBP only”. It is clear that the material supplied was meant for supply as ration to Army/police personnel and not for any sale, let alone retail sale. Thus, the judgment of the Apex Court in Jayanti Food Processing’s case is applicable. Where there is no requirement for declaring retail sale price, the provisions of Section 4A will not get attracted.

Decision: - Appeal rejected.

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Case: - CCE, Tiruchirapalli v/s Sambandam Mills

Citation: - 2009 (94) RLT 693 (CESTAT-Che)

Issue: - Whether units availing SSI exemption shall be liable to demand and penalty if they clandestinely removed their finished products?

Brief Facts: - Demand was raised against the respondent-assessee on the ground that they have clandestinely removed dutiable cotton cone yarn in the guise of cotton hank yarn, which was not liable to duty. The demand was confirmed by the Joint Commissioner and penalty was also imposed. In appeal, the Commissioner (Appeals) accepted the plea that the respondents are eligible to the benefit of SSI exemption and set aside the demand and penalty. Revenue has come in appeal against this order.

Appellant’s Contentions: - Revenue contended that respondent-assessee should not have been allowed exemption based on the value of the clearances for 1994-95 as per Notification No. 1/93-CE dated 01.03.93 in as much as such plea can be entertained only when a manufacturer is under a bona fide belief of the non excisability or non dutiability of his product or at least when he is unaware of the existence of such exemption at the time of commission of offence and in instant case the respondent could not be said to be unaware of the existence of the SSI exemption at the time of clearance.

Reasoning of Judgment: - The Tribunal held that the plea of the revenue is not tenable. The Tribunal found that there is no dispute that the value of clearances of the respondents was within the ceiling limit prescribed in the SSI notification. Even there is an allegation of clandestine removal of the goods, if the benefit of SSI exemption is available, it is required to be allowed. The Tribunal relied upon the judgment given in CCE, Jalandhar v/s Shanti Fasteners [2008 (226) ELT 340 (P&H)] in which it was held that duty cannot be demanded even though goods are cleared without any covering document when the assessee did not cross the exemption limit prescribed for SSI exemption. No legal infirmity is there in the impugned order.

Decision: - Appeal rejected. Cross objections dismissed.

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Case: - NBM Industries v/s CCE, Rajkot

Citation: - 2009 (94) RLT 367 (CESTAT-Ahmd)

Issue: - Whether refund of unutilised cenvat credit in case of clearances to 100% EOU can be allowed as the sales to 100% EOU is not real export but only deemed export?

Brief Facts: - Appellant-assessee had filed refund claim of cenvat credit on the inputs used in the goods manufactured and cleared to 100% EOU. The refund claim was rejected on the ground that it was only deemed export and not a real export. Appellant has therefore approached the Tribunal.

Appellant’s Contentions: - Appellant have relied upon the judgment given in Virlon Textile Mills Ltd [2007 (79) RLT 783 (SC)] wherein it is held that deemed export are equivalent to physical exports. They have also relied upon Board Circular wherein drawback was allowed in respect of deemed exports also. They have also relied upon Sanghi Textile Ltd [2006 (77) RLT 268 (CESTAT-Ban)] wherein it was held that deemed credit can be availed for the goods which are cleared to 100% EOU and refund claim of deemed credit is admissible.

Respondent’s Contentions: - Revenue relied upon the judgment given in BAPL Industries Limited [2007 (211) ELT 23 (Madras)] and Quality Screen [2008 (85) RLT 748 (CESTAT-Mum)].

Reasoning of Judgment: - The Tribunal held that the decision given in Sanghi Textile case is a divisional bench decision and this was not referred to in the decision of the single member in the case of Quality Screens. The decision of Sanghi Textile related to Rule 5. It was further held that Rule 5 provides for refund in respect of goods which are used in the intermediate product cleared for export also. Now that 100% EOUs are eligible for cenvat credit and when they pay duty in respect of DTA sales, credit is admissible to the recipients. Therefore, the cenvat credit is to be allowed.

Decision: - Appeal allowed with consequential relief.

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Case: - Commissioner of C. Ex., Pondicherry v/s Spic Pharmaceuticals Division

Citation: - 2009 (244) E.L.T. 132 (Tri.-Chennai)

Issue: - Whether the Modvat of additional duty will allowed merely by debiting the duty in DEPB?

Brief Facts: - In the above case the Commissioner (Appeals) allowed the respondent to avail the credit of additional duty, which was paid through DEPB scrip merely by debiting the duty in DEPB. The Commissioner (Appeals) relied on the Tribunal’s decision in the case of Polyhose India Pvt. Ltd v/s Commissioner (Tribunal) and allowed the appeal in the favour of Assessee. But the appellant on the basis of (Larger Bench) Tribunal’s Decision in case of Essar Steel Ltd V/s Commissioner went into a further appeal in Tribunal against the order of Commissioner (Appeals).

Appellant’s Contention: - The appellant has argued that the modvat of additional duty has not been allowed to respondent only on the basis of duty debited in DEPB pass book relying on the (Larger Bench) Tribunal Decision in Essar Steel Ltd v/s Commissioner, in which The Tribunal coated the case Polyhose India Pvt. Ltd v/s Commissioner; Further it was alleged that the Tribunal did not discussed the fact which was mentioned in the notification 34/97 and only emphasis on the Rule 57 G of Central Excise Rules was made.

Reasoning of Judgment: - The Tribunal deciding the case held that relying on the lower appellate authority is no longer good law in the light of the subsequent decision of the Larger Bench of The Tribunal, therefore the credit of additional duty is not admissible to the respondents. However, as it was held in the case of Polyhose India Pvt Ltd that the credit is admissible on the basis of duty debit in DEPB, therefore Tribunal do not accept the prayer for imposition of penalty on the respondents.

Decision: - The appeal partly allowed.

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Case: - M/s Ahmednagar Alloys P Ltd v/s Commissioner of Central Excise & Customs, Aurangabad

Citation: - 2009-TIOL-2038-CESTAT-MUM

Issue: - Credit is not available on Xerox copies of Bill of entry. However, if the said Xerox copies are attested by the Customs Authority issuing the original bill of entry then, credit will be admissible or not ?

Brief Facts: - The appellant took credit of CVD on the basis of Xerox copies of bills of entry for the period from May 2003 to March 2005. The Lower Authorities denied Cenvat credit on the ground that these were inadmissible documents. Appellant has approached the Tribunal.

Appellant’s Contentions: - Appellant contended that a reasonable opportunity was not granted by the Lower Authorities to him to get these documents attested by the proper officer of customs. If such an opportunity would have been given, the appellant would have gotten the copies of bills of entry attested and produced before the Adjudicating Authority.

Reasoning of Judgment: - The Tribunal held that the order of the Lower Authorities is correct because Xerox copies of bills of entry are neither admissible under Rile 9 nor reliable for the purpose of grant of Cenvat credit. However, the Authorities ought to have given the appellant a reasonable opportunity of getting these copies attested/certified by the proper officer of customs. For the ends of justice, an opportunity is given to the appellant to produce certified or attested copies of bills of entry in question. Matter is remanded with direction to Original Authority to take fresh decision after giving appellant reasonable opportunity of producing duly attested copies of bills of entry and also of being personally heard. Impugned order modified accordingly.

Decision: - Appeal allowed by way of remand.

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Service Tax Section:

Case: - Ahmednagar Merchants Co-operative Bank Ltd v/s CCE, Aurangabad and Vice-versa

Citation: - 2009 (94) RLT 96 (CESTAT-Mum)

Issue: - Cenvat credit of service tax can be availed only if the basic requirements like service tax amount and service tax registration number of the input service provider are mentioned in the invoice.

Brief Facts: - Appellant is a bank registered under Banking & Other financial Services. They are paying service tax on commission received from customers and also availing the Cenvat Credit of service tax levied on input services like Telephone Bill Courier charges etc. They are also taking 100% credit on commission paid on other Banks. The credit is taken on this service on the basis of work sheet enclosed with ST-3 Return without any documentary evidence for the period 01.10.05 to 30.09.06. Thus, show cause notice was issued on the ground that the said document was not a document prescribed under Rule 9 (1) (f) (g) of the Cenvat Credit Rules, 2004. The Adjudicating Authority confirmed the service tax demanded and also imposed penalty under Section 76 of the Finance Act, 1994 r/e Rule 15 of the CCR, 2004. Interest was also demanded. In appeal, the Commissioner (A) upheld the demand of service tax and interest. But reduced the penalty to Rs. 25, 000/- imposed under Section 76. Appellant-assessee has filed appeal against the demand of service tax and interest before the Tribunal. Revenue has also filed appeal before the Tribunal challenging the reduction of penalty.

Appellant’s Contentions: - Appellants contended that it is evident from the documents on which they have availed the Credit that the other banks has charged the commission and have also deducted the same alongwith Service Tax while remitting. The only lacuna is that the other banks have not shown the Service Tax and Service Tax Registration Number separately. They tried their level best to plug this lacuna but they were only in position to get the Service Tax registration numbers of the other banks. It was submitted that getting the Service Tax paid on each sip was not possible because of the heavy volumes of transactions. Therefore, there was substantial compliance of the procedure.

Respondent’s Contentions: - Revenue contended that appellants were not in a possession of invoices, bills or challans. The daily summary cannot be treated as valid documents in as much as from the sample copies produced during the course of hearing before the Assistant Commissioner, it is observed that the said summary contains only these details: - (i) OBC No & date, (ii) OBC date, (iii) Date, (iv) Party commission, (v) Bank Commission, (iv) Difference. Thus, the basic requirements of the invoices are not forthcoming from the said statement.

Further, with regard to reduction of penalty, it was contended that the statute does not provide discretion of quantification of penalty except from imposition of penalty equal to service tax amount determined under Section 68 but does not provide the discretion to reduce the quantum of penalty less than the service tax amount so determined under Section 68. Reliance was placed on the judgments of Union of India v/s Dharmendra Textiles Porcessors [2008 (89) RLT 103 (SC-LB), Bhilai Engineering Co. Ltd v/s CCE, Raipur [2007 (8) STR 294 (Tri-Del)] and Chaitanya Advertising V/s CCEx and Cus, Ahmedabad [2007 (80) RLT 111 (CESTAT-Ahmd)].

Reasoning of Judgment: - The Tribunal held that it is obvious that Service tax credit cannot be taken when the Service tax has not been shown to have been paid by the Service provider. It is observed that even the proviso inserted to Rule 4A of the Service Tax Rules, 1994 vide Notification No. 30/2004-ST dated 22.09.04 does not help the appellant because the crucial information and the material particulars required for availing credit of service tax are not available in the documents. Hence the impugned documents are not valid documents to avail the credit because of non-fulfillment of the requirements of the provisions of Rule 4A of the Service Tax Rules r/w Rule 9 of the CCR, 2004. The appellants have not substantially complied with the provisions of Cenvat Credit Rules. Cenvat Credit was rightfully disallowed and demand was rightly confirmed.

With regard to issue of justifiability of the impugned order in view of SCN alleging wring availment of credit if Service Tax under CCR and recovery thereof for the wrong availment; the Tribunal held that appellants contentions do not have any merit. Once it is found that the Cenvat credit was irregularly availed by the appellants and by implication to the extent under Rule 14 of the CCR. Therefore, the Show cause notice invoking provisions of Rule 14 of CCR r/w Section 11A of the CEA, 1944 and Section 73 of the Finance Act, 1944 r/w Section 11AB CEA, 1944 and Section 75 of Finance Act, 1944 for recovery of irregularly availed Cenvat Credit and demanding interest respectively is perfectly in order and is within the framework of law. Appeal of the appellant is rejected as being devoid of any substance and merit.

With regard to reduction of penalty by the Commissioner (A), the Tribunal held that it the assessee is coming to gripe with the service tax levy, which is of recent origin. The assessees are finding it difficult to properly comprehend and understand the nitty-gritty of the Service Tax laws and their nuances. Section 80 provides relief in such a situation if the assessee proves that there was reasonable cause for failure to deposit service tax as provided in the various provisions imposing penalty. This is a unique provision and cannot be overlooked or ignored while considering the imposition of penalty.

In the instant case, the Commissioner (A) has not cited this provision specifically yet his action of reducing penalty was done keeping in mind Section 80. The cases cited by the Revenue do not deal with Section 80. The order of the Commissioner (A) imposing lesser penalty cannot be faulted with.

Decision: - Appeal of the appellant-assessee dismissed. Appeal of Revenue also rejected.

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Case: - Commissioner of Central Excise, Pune v/s Aadi Plastic Industries (P) Ltd

Citation: - [2009] 23 STT 349 (MUM. - CESTAT)

Issue: - Whether the respondent is entitled for Cenvat credit on Service Tax paid for outward transportation under Goods Transport Agency?

Appellant’s Contentions: - Revenue relied upon the Board Circular No. 97/8/2007/ST, dated 23-8-2007 and relied on Ambuja Cements Ltd. v/s Union of India {[2009] 20 STT 182 (Punj. & Har.)}. It was submitted that the Board Circular clarifies the term ‘place of removal’ as: -

“(i) a factory or any other place or premises of production or manufacture of the excisable goods;

(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty;

(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed.”

It is further contended that the judgment in Ambuja Cement case provided that although the period involved was prior to the date of Circular but the parameters laid down in the Circular is to be fulfilled by the assessee to avail Cenvat credit on GTA service.

Respondent’s Contentions: - The respondent submits that from the definition it is very much clear that the service of outward transportation up to the place of removal is only considered as inputs service for manufacturer, which is specifically mentioned in precise terms. Hence, there remains no doubt and there arises no question of any other interpretation. Reliance is placed on the decision given in ABB Ltd. v/s CCE&ST {[2009] 21 STT 77 (Bang. - CESTAT) (LB)}.

Reasoning of Judgment: - The Tribunal held that the Lower Authorities have not given any findings on the parameters laid down in the said Circular referred by the Revenue during the course of arguments as the period involved is prior to the date of Circular. It needs an examination to that effect. Accordingly, matter remanded back to examine the case in the light of the Circular No. 97/6/2007-ST and for passing appropriate order after hearing both the sides.

Decision: - Matter remanded back.

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Case: - Commissioner of Central Excise, Chandigarh v/s Grewal Trading Co.

Citation: - [2009] 23 STT 384 (NEW DELHI - CESTAT)

Issue: - Whether penalty under Section 76 can be set aside if penalty under Section 78 is also imposed?

Brief Facts: - Show cause notice was issued to respondent-assessee for non payment of service tax with the intent to evade duty for the period 2002 to 2005. The demand for service tax with interest was confirmed and penalties under Section 78 and 76 were also imposed. In appeal, the Commissioner (A) upheld the demand of service tax and penalty imposed under Section 78 but set aside the penalty under Section 76 on the ground that penalty both under Section 76 and Section 78 cannot be imposed. Appeals have been filed both by the Revenue and respondent-assessee before the Tribunal.

Appellant’s Contentions: - Revenue contended that the issue involved in this case has been decided in their favour by the High Court of Karnataka in the case of CCE & ST v/s First Flight Couriers Ltd {[2008] 12 STT 127} and recently by the Division Bench of the Tribunal in the case of Bajaj Travels Ltd. v. CCE {[2009] 21 STT 412 (New Delhi - CESTAT)}.

Reasoning of Judgment: - The Tribunal held that there was no specific provision that when penalty under section 78 is imposable, the penalty under section 76 would not be imposable. Penalty was imposable on the respondent under Section 78 and as well as under Section 76. Moreover, the issue has been decided in Revenue’s favour in the case of CCE & ST v/s First Flight Couriers Ltd and in the case of Bajaj Travels Ltd. v. CCE. Impugned order setting aside penalty under Section 76 is set aside. And the order of Adjudicating Authority imposing penalty under Section 76 is restored.

Decision: - Revenue’s appeal allowed. Cross Objections of the respondent-assessee are rejected.

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Case: - Commissioner of Central Excise, Guntur v/s Jocil Ltd

Citation: - [2009] 23 STT 396 (BANG. - CESTAT)

Issue: - Whether a service recipient is eligible to avail abatement of 75% on GTA service and discharge liability only on remaining 25% and whether cenvat credit can be utilised for payment discharge of Service tax payable on GTA service?

Brief Facts: - The respondent-assessee availed abatement of 75% of the freight paid by them and paid service tax on the remaining 25% of the gross value, in terms of Notification No. 32/2004-ST, dated 03.12.2004. The Department contended that the abatement was irregularly availed by the respondent. Another issue involved is that respondents have paid Service Tax and education cess on the freight charges incurred on transportation of goods by utilizing the Cenvat credit. The Revenue contended that the cenvat credit was wrongly utilised to pay service tax by contravening to the provision of Sections 68 and 70 of the Finance Act, 1994 r/w Rules 6 and 7 of the Service Tax Rules, 1994.The Adjudicating Authority confirmed the demand and also sought to recover interest under Section 75. In appeal, the Commissioner (Appeals) has set aside the impugned order on the ground that in the appellant’s own case, he had taken a view that the adjudicating authority erred in disallowing Cenvat credit. Aggrieved by this order, Revenue has come in appeal before the Tribunal.

Appellant’s Contentions: - Revenue contended that the Commissioner (A) ought to have examined the issue in the light of provisions of Rule 3 (4) of the CCR, 2004 which provides the duties/taxes, the payment for which cenvat credit can be used. It was contended that reading the definition of ‘output service’ and ‘provider of taxable service’ in conjunction, it is clear that to from ‘output service’, taxable service is to be actually provided by the ‘provider of taxable service’. Even if due to a legal fiction, a consignor or a consignee becomes a person liable to pay ‘service tax’ for the limited purpose of tax, it cannot be said that they have actually provided any taxable service. In the present case, the service provided by a Goods Transport Agent (GTA) for which the consignor or the consignee are made liable to pay service tax, does not become an ‘output service’ for such consignor or consignee. Hence, the Service Tax payable by the consignor or consignee on goods transport by road cannot be paid through credit accumulated by such consignor or consignee but has to be paid in cash.

It was further contended that the Explanation to Rule 2 (p) of the CCR is applicable only if ‘person liable for paying service tax’ does not provide any taxable service or does not manufacture final products. Then only the service for which he is liable to pay service tax shall be deemed to be the output service. In the present case, the assessee is manufacturer of excisable goods and hence the reliance is totally misplaced. Hence, the assessee is not entitled to utilize the Cenvat credit for payment of Service Tax and Education Cess.

Respondent’s Contentions: - Respondent submitted that the issue is no more res integra and has been decided by the various decisions of this Tribunal in an identical issue. Reliance was placed on the decision in Andhra Pradesh Paper Mills Ltd. v/s CCE [Final Order No. 728 (Bang.) of 2007 & A. ST/340 of 2006, dated 28-6-2007] and RRD Tex (P.) Ltd. v/s CCE {[2007] 10 STT 255 (Chennai - CESTAT)}.

Reasoning of Judgment: - The Tribunal held that with regard to issue of eligibility of respondents to avail benefit of Notification No. 32/2006-ST and discharge Service Tax liability on the 25% of the amount of the gross value of transportation charges paid by him as a recipient of services, the issue is no more res integra and covered by various decisions and more specifically Andhra Pradesh Paper Mills Ltd v/s CCE and RRD Tex (P.) Ltd v/s CCE.

With regard to issue of utilization of Cenvat credit for the payment discharge of Service Tax payable on transport service, the Tribunal held that Service tax will be deemed to be an ‘output service’, as the appellant is only a recipient of the transport of goods by road service. When the service is deemed to be an ‘output service’ the service tax can be paid by way of Cenvat Credit in terms of Rule 3(4)(e) of the Cenvat Credit Rules. Thus, impugned order is upheld as being correct and legal.

Decision: - Appeal rejected.

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Customs Section:

Case: - Commissioner of Customs (Import), Nhava Sheva v/s Arihant Metal & Alloy Inds

Citation: - 2009-TIOL-1446-CESTAT-MUM

Issue: - Excess duty paid mistakenly by the Assessee’s CHA cannot be rectified under Section 154 as being a clerical mistake. Assessee has to file for amendment of the bill of entry and after amendment has to file for refund within limitation.

Brief Facts: - Respondent-assessee has filed a Bill of entry dated 09.01.07 for clearance of imported goods. The CHA by mistake declared the duty payable as @ 20% whereas it was required to be paid @ 7.5%. The custom duty was paid by the respondent on 12.01.07. When the respondent and the CHA noticed their mistake, made request for amendment of document and furnished required information/evidence in support of their contention. The Addl. Commissioner allowed the amendment of the Bill of Entry on 12.01.07 but did not refund excess amount deposited. The respondent filed appeal before the Commissioner (Appeals) who disposed of the appeal by observing that “as a result of reassessment of Bill of Entry, refund is due to the appellant (respondent herein) to extent of excess duty deposited. However, it is seen that refund has not been denied at any stage and therefore, no grievance of the appellant has arisen”. Accordingly, respondent filed refund claim on 20.08.07 which was rejected as being time barred by the Addl. Commissioner. In appeal, the Commissioner (Appeals) set aside the order-in-original with direction to the Addl. Commissioner to process the respondent’s refund claim. The department has come in appeal against this order.

Appellant’s Contentions: - Revenue contended that the provisions of Section 154 were not applicable as Section 154 provides for clerical or arithmetical mistakes or error arising from any accidental slip or omission and the instant case did not fall under any of the situations which may attract the provisions of Section 154 but the respondent voluntarily paid the duty at higher rate. It is also submitted that the provisions of Section 27 of the Customs Act is applicable in this case and the adjudicating authority rightly rejected the claim petition on the account that the application for refund claim is filed beyond the limitation period of 6 months as prescribed under Section 27. Reliance was placed on the judgments given in case of Union of India v/s Kirloskar Pneumatic Co. [1996 (84) ELT 401 (SC)], Porcelain Electrical Mfg. Co. [1998 (98) ELT 583 (SC)], Asst. Engr. (Civil), PCC Pole Factory, sub-div. CSEB v/s CCE, Raipur [2005 (191) ELT 370 (Tri-Del)] and Mecon Ltd v/s CC, Calcutta [2004 (153) ELT 574 (Tri-Kolkata)].

Respondent’s Contentions: - Respondent- assessee submitted that this was a clerical error of the CHA by paying the customs duty @ 20% instead of 7.5%. Reliance was placed on the judgments given in Keshari Steels v/s CC, Bombay [2006 (155) ELT 320 (Bom)], Canon India Pvt Ltd [2006 (200) ELT 83 (Tri. Del)], Kiloskar Oil Engines Ltd [2004 (174) ELT 54 (Tri-Mum)], Maize Products v/s CC, Kandla [2009 (236) ELT 691 (Tri-Ahmd)] and CCE, Bangalore III v/s Motorola India Pvt Ltd [2006 (206) ELT 90 (Kar)].

Reasoning of Judgment: - The Tribunal held that the duty was paid by the respondent voluntarily @ 20% instead 7.5%. Moreover, when the respondent found out that they have paid excess duty they asked the proper officer for the amendment of the document and accordingly the same was done but by the time amendment was made the respondent had paid the excess duty. The respondent instead of filing refund claim only preferred an appeal against the order of re-assessment and filed refund claim after the expiry of 6 months from the date of payment of duty as prescribed under Section 27 of the Customs Act, 1962. Thus, the act of the respondent was not covered by Section 154 of the Customs Act, 1962. Impugned order set aside.

Decision: - Appeal allowed. Cross objections disposed of accordingly.

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