2013 (2) TMI 671 - CGOVT - Central Excise

Denial of refund claim - Rounding off of amount as per Section 37D - amount of rebate as a whole is to be rounded off or Refund/rebate of duty per pouch to be rounded off - Held that - method of rounding off provided in the said Section 37D is applicable for any amount of duty, penalty, interest, fine, rebate/refund or any other sum. The amount cannot be construed to have a meaning that rebate/refund should be rounded off for paise in respect of each unit pouch. The provision clearly implies that such rounding off should be made for aggregate of sum/amount of rebate and not on individual units of rebate per pouch. As such the said provision makes it unambiguous that the rounding off has to be made in aggregate of sum/amount payable or due. Hence, in their impugned cases, the rounding off should be done on whole amount calculated @ 2.3875 per pouch multiplied by no. of pouches and not @ 2.39 multiplied by no. of pouches, as has been done by the original authority in this impugned cases. - rounding off has to be done for aggregate sum/amount and not on individual units of rebate per pouch - Decided in favour of Revenue.

Summary

Issues:
Calculation of rebate amount and rounding off under Section 37D of the Central Excise Act, 1944.

Analysis:
The revision applications were filed against orders-in-appeal regarding the rounding off of rebate amount per pouch. The department argued that rounding off should be done for the total amount of rebate, not per pouch, as per Section 37D of the Central Excise Act, 1944. The impugned orders had rounded off the amount to Rs. 2.39 per pouch instead of Rs. 2.3875, resulting in excess payment of Rs. 37,444. The Commissioner (Appeals) upheld the original orders, leading to the revision applications before the Central Government.

The Central Government analyzed Section 37D, which mandates rounding off to the nearest rupee for any sum payable or due under the Act. The provision applies to duty, penalty, interest, fine, rebate, or any other sum, emphasizing rounding off the aggregate amount, not individual units. The Government found the department's contention valid, as the rounding off should be based on the total amount calculated per pouch multiplied by the number of pouches, not per pouch. The Government highlighted the importance of interpreting the provision in a manner that ensures rounding off is done for the aggregate sum.

The Government also considered a previous order by the Revisionary Authority, which made passing remarks on rounding off but did not delve into Section 37D. After a thorough review, the Government concluded that rounding off should be done for the aggregate sum, aligning with the department's argument. Consequently, the Government set aside the Orders-in-Appeal and allowed the revision applications, stating the success of the applications in the specified terms. The judgment was concluded with the order being so granted by the Central Government.