2004 (5) TMI 455 - AT - Central Excise

Summary

Issues:
1. Debiting duty on inputs through the wrong account.
2. Discrepancy in the duty payment process between units.
3. Appeal against the Commissioner (Appeals) decision.

Issue 1: Debiting duty on inputs through the wrong account:
The case involves the receipt of duty-paid inputs by a unit for utilization in another unit, where the duty was debited through the wrong account, leading to a breach of Rule 57-S. The respondents argued that the mistake made by the originating unit should not penalize the receiving unit. They contended that the balance in both relevant accounts would have made the correction revenue-neutral. The Commissioner (Appeals) agreed with this argument, considering the breach as technical and condonable. The Tribunal upheld this decision, emphasizing that the deficiency in the duty paying document was a condonable lapse, making the Commissioner's order sustainable.

Issue 2: Discrepancy in the duty payment process between units:
The revenue's appeal contended that the duty on the received inputs should have been discharged from a specific account, RG 23A Pt. II, rather than the account through which it was debited, RG 23C Pt. II. However, the Tribunal, after reviewing the Commissioner (Appeals)'s reasoning, found that both accounts had sufficient balance to cover the duty payment, making the correction a revenue-neutral exercise. The Tribunal affirmed the approach taken by the Commissioner (Appeals) in treating the deficiency as a condonable lapse, ultimately rejecting the revenue's appeal.

Issue 3: Appeal against the Commissioner (Appeals) decision:
The revenue's appeal solely challenged the method of duty payment for the inputs, without disputing other aspects of the impugned order. The Tribunal, after considering the balance in the relevant accounts and the technical nature of the breach, upheld the Commissioner (Appeals)'s decision as correct. Consequently, the Tribunal rejected the revenue's appeal, affirming the sustainability of the Commissioner (Appeals)'s order in condoning the deficiency in the duty paying document as a technical error.