2007 (1) TMI 331 - AT - Central Excise

Summary

Issues:
1. Correcting entries in Personal Ledger Account (PLA) by the assessee.
2. Interpretation of Section 11B of the Central Excise Act regarding refund/credit taking.
3. Imposition of duty demand, penalty, and correctness of adjudication order.

Analysis:
1. The appellant initially debited excise duty in its PLA for cotton fabrics supplied on 14-9-1995 but later realized no duty was payable. The appellant reversed the duty debit and filed the correct position in the excise return for September/1995. The show cause notice alleged the duty debit was correct, but the adjudicating authority accepted the appellant's explanation based on Notification No. 40/95, allowing suitable credit or debit entries in the PLA upon self-detection by the assessee.

2. The Commissioner (Appeals) considered the case as a refund of duty paid and cited Section 11B of the Central Excise Act, stating no suo-motu refund/credit was permissible. Consequently, the Commissioner reversed the adjudication order, confirmed duty demand, and imposed a penalty. However, the Tribunal found that no excise duty was payable on the consignment, and the dispute centered on the correction of the incorrect debit in the PLA by the assessee, making the duty demand unsustainable.

3. The Tribunal emphasized that when no duty was attracted on the consignment, no demand should arise, leading to the dismissal of the penalty imposition as unjustified. The adjudicating authority's decision allowing corrections in account books by assessees was supported by previous Tribunal judgments, further strengthening the appellant's case. Ultimately, the duty demand and penalty were deemed unsustainable, set aside, and the appeal was allowed with any consequential relief for the appellant.