2004 (1) TMI 569 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57F regarding re-credit of duty amount.
2. Validity of re-credit taken in PLA instead of RG 23A Part II.
3. Impact on Revenue interest and imposition of penalty.

Analysis:
1. The main issue in this case revolves around the interpretation of Rule 57F concerning the re-credit of duty amount. The appellant had cleared goods to a job worker under Rule 57F and received them back after re-processing. The dispute arose regarding the re-credit of 10% of the value in the PLA under sub-rule (7) of Rule 57F. The lower authorities held this action to be irregular as sub-rule (7) allows re-credit only in RG 23A Part II. The appellant argued that a subsequent circular and a form prescribed under Rule 57F mentioned both PLA and RG 23A Part II for re-credit, leading to a genuine belief that re-credit in the PLA was permissible.

2. The second issue concerns the validity of taking re-credit in the PLA instead of RG 23A Part II. The learned SDR supported the lower authorities, emphasizing that Rule 57F clearly specifies re-credit in the account maintained under sub-rule (7) of Rule 57G, which refers to RG 23A Part II. The form Revised Annexure IV also indicated that Column 20 pertains to particulars of payment of duty on scrap/waste under column No. 19. However, the Tribunal noted the genuine confusion on the part of the appellants and observed that the Revenue interest was not affected by the re-credit in the PLA.

3. The final issue addressed the impact on Revenue interest and the imposition of penalty. After hearing both sides and examining the case records, the Tribunal found that the re-credit in the PLA was due to genuine confusion and did not harm Revenue interest. As there was no dispute about the re-credit amount and rectification could be made in the accounts, the Tribunal set aside the impugned orders and allowed the appeal. The Tribunal concluded that there was no basis for raising a demand or imposing a penalty on the appellants, as the matter could be rectified by correcting the PLA and RG 23 Part II accounts.