EXCESS PAYMENT OF S&H, Central Excise

[Ajay Kedia]

I have by mistake paid S & H of Rs. 2.30 lacs instead of BED while making excise payment thru e- payment. I want to get the excess amount transferred to BED head from S&H. Concerned Commissioner oficer is not aware of any circular as to how this excess payment can be adjusted or accounting head can be changed on the contrary e-pay and accounts office , chennai has confirmed me over phone that this can be done but application has to be forewarded by jurisdictional commissionerate office but it is unfortunate that my jurisdictional commissionerate office is not aware of such notification. CAN ANY ONE GET ME THE NOTIFICATION NO. & DATE OF SUCH NOTIFICATION SO THAT THE HECTIC AMOUNT DEPOSITED WRONGLY AND LYING FOR ABOUT THREE MONTHS NOW IS TRANSFERRED TO BED.

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[CA Rachit Agarwal]

Duty paid under wrong accounting head, tax not to be demanded again, Tri

Shri B.L. Narsimhan, Advocate, for the Appellant.

Shri Sunil Kumar, DR, for the Respondent.

[Order per : Justice R.M.S. Khandeparkar, President (Oral)]. - Heard Shri B.L. Narsimhan, learned Advocate for the appellants and Shri Sunil Kumar, learned DR for the department.

2. The appellants challenge the order dated 27-2-2009 passed by the Commissioner, Allahabad whereby the appellants have been ordered to pay Special Excise Duty amount to Rs. 3,63,50,722/- alongwith interest thereon and also imposed penalty of equal amount. In addition, the penalty of Rs. 5,000/- has been imposed on the appellants under Rule 27 of Central Excise Rules, 2002.

3. The appellants are engaged in the manufacture of Aerated Waters classified under chapter sub-heading 2201.20 and 2202.20 of the First Schedule to the Central Excise Tariff Act, 1985 and also avail the benefit of Cenvat Credit on the inputs/capital goods used in or in relation to manufacture of their final products.

4. During the course of scrutiny of records of the appellants for the period April, 2003 to September, 2004, the audit party of the department noticed that the appellants had deposited an amount of Rs. 90,00,000/- in Basic Excise Duty head (Accounting Code 00380003) through TR-6 No. 22 dated 1-5-2003. It was further noticed that the appellants had divided this amount in two parts, in PLA i.e. Rs. 60,00,000/- for Basic Excise Duty and Rs. 30,00,000/- for Special Excise Duty in the Accounting Code 00380013. It was also noticed that the appellants utilized the credit of Rs. 30,00,000/- towards payment of Special Excise Duty for the month of April, 2003. It was also noticed that the appellants had debited Special Excise Duty account of PLA without having proper and sufficient balance and thus resorted to over drawal of Rs. 30,00,000/-. The department therefore on the ground that Special Excise Duty amount to Rs. 30,00,000/- was short paid by the appellants issued show cause notice dated 29-4-2008 for the period April, 2003 to June, 2004. The proceedings were contested by the appellants. However, by the impugned order, the demand was confirmed as above.

5. Learned Advocate appearing for the appellants assailed the impugned order on two grounds. Firstly that the department had no justification to invoke extended period of limitation in the facts and circumstances of the case and secondly that the authority had failed to take note of the fact that the amount of duty due and payable was already deposited with the Government, though partly under wrong Code. It was purely on account of bona fide mistake on the part of the employee of the company.

6. Learned DR on the other hand submitted that considering the facts which have been placed on records and undisputed fact that there was non compliance of procedure regarding payment of duty, no fault can be found with the impugned order.

7. Undisputed facts are that for the period April, 2003 to June, 2004 the total quantum of amount of duty including Basic Excise Duty and Special Excise Duty, which was payable by the appellants was transferred to the account of Government and as far as quantification of liability is concerned, there was no default by the appellants in clearing the same. Only lapse, if it can be called so on the part of the appellants in this regard was that a part of duty which was required to be deposited as Special Excise Duty to the tune of Rs. 3 crores was also deposited in the accounting code No. 00380013. This apparently discloses that there was neither any intention to evade payment of duty nor even to withhold the amount of duty payable to the Government, but mere mistake on the part of the assessee in specifying proper code number while discharging liability regarding the Special Excise Duty. Nevertheless the quantum of duty in this regard was duly transferred to the account of the Government. There cannot be any dispute that there was mistake on the part of the appellants in complying with the procedure regarding the transfer of the amount or specifying the correct code number but that itself cannot be construed as deliberate attempt to evade the payment of the duty.

8. Besides the circular No. 7/93-CX.6 dated 23-4-1993 issued by the Board clearly permitted the transfer of credit balance lying in Personal Ledger Account under one minor head to another minor head. Obviously therefore the record clearly discloses that there was no default in payment of duty as such by the appellant so as to warrant an action under the provision of law regarding recovery of short payment or non payment of duty and also for proceeding to impose penalty. In the absence of any mala fide intention to evade duty and even without withholding any amount due to the Revenue on account of duty liability there is absolutely no case for imposition of penalty.

9. On perusal of the records, in our considered opinion, it was purely a bona fide mistake on the part of the appellants in depositing the amount of Rs. 3 cores under code No. 00380003 which is of Basic Excise Duty instead of Special Excise Duty. In such a situation, the appellants cannot be directed to pay the said amount again to the account of Government. The authority can require the appellant to execute the required documents for the purpose of transfer the amount from one accounting code to another accounting code so that records are properly maintained regularly for the discharge of duty liability.

10. With the above observation, we set aside the impugned order allowing the appeal accordingly.