2004 (1) TMI 514 - AT - Central Excise

Summary

Issues:
1. Challenge against order confirming excise duty demand and penalty.
2. Allegation of paying excise duty on lower amount than actual MRP.
3. Contention of rounding off MRP leading to excess duty payment.
4. Consideration of rounding off method by the Commissioner.
5. Excess duty payment on higher side of MRP.
6. Excess duty payment on lower side of MRP.
7. Appeal outcome leading to refund entitlement.

Analysis:
1. The appeal challenged an order by the Commissioner confirming a demand of Rs. 1,56,955 and imposing a penalty under Section 11AC, based on the allegation that the appellants were paying excise duty on a lower amount than the actual Maximum Retail Price (MRP) due to rounding off to the nearest lower rupee. The appellant contended that rounding off sometimes resulted in paying more duty than required, leading to a claim for refund. The appellant argued that the rounding off was not intended to evade duty payment, thus the extended limitation period should not apply, and no penalty should be imposed.

2. The Tribunal observed that the Commissioner did not consider the appellant's contention that due to rounding off, excess duty had been paid on many occasions compared to the actual MRP. After reviewing the statement submitted by the appellant during a personal hearing, it was found that due to rounding off on the higher side of MRP, the appellant had paid an excess amount of Rs. 1,61,878, while the duty alleged to be short levied due to rounding off on the lower side was Rs. 1,56,955. This analysis revealed that the appellant had actually paid an excess amount of Rs. 4,924 compared to the duty due on the MRP.

3. Considering the above findings, the Tribunal concluded that the impugned order could not be sustained. Therefore, the order was set aside, and the appeal was allowed. The appellant was deemed entitled to a refund of Rs. 4,924 in accordance with the rules. The appeal was allowed based on the discrepancy in duty payments resulting from the rounding off method applied by the appellant, leading to a refund entitlement due to the excess payment made.

4. In summary, the Tribunal's decision highlighted the importance of considering all aspects of duty payment calculations, especially when rounding off methods are employed, to ensure that the correct amount of duty is paid. The judgment emphasized the need for a thorough examination of the appellant's contentions and supporting evidence to determine the actual duty liability accurately, leading to a favorable outcome for the appellant in this case.