2015 (12) TMI 1593 - AT - Central Excise

Clandestine removal of goods - manufacture of Industrial Valve - descriptions of the goods are not tallying between the invoice and the purchase order - Held that - I find that both the lower authorities rejected the refund claim only on the ground that some of the reference and description of goods are not tallying between the invoice and the purchase order issued by the customer. However, the facts that the price was charged on higher side and excess duty paid thereupon is not under dispute. I find that to avoid any doubt or confusion on the fact that whether the price was charged wrongly on higher side and accordingly excess duty was paid, the customer M/s. BPCL issued a letter where it was mentioned that the actual unit price for the item is ₹ 36495 but the appellant has wrongly invoiced at ₹ 3,64,495/-. Accordingly, corresponding value and the duty was also charged on the higher side. However, the customer have corrected the invoice and the payment towards that invoice No. 439 dt. 30.4.2009 was made as per the reduced/corrected amount. I have also observed that in the payment advice issued by M/s. BPCL, it is clearly mentioned therein that against the invoice No. 439 dt. 30.4.2009 the payment of only ₹ 6,76,732/- was made, as against the value shown in the invoice i.e. ₹ 14,15,748/-. All the doubt stands cleared that the appellant has charged higher amount inadvertently and accordingly the excess duty was also paid. With the above factual position, I do not find any reason why the refund should not be granted to the appellant for the excess paid duty. As per my above discussion, I am of the considered view that the appellant is entitled for the refund in respect of excess paid duty. I therefore set aside the impugned order and allow the appeal.

Summary

Issues:
Refund claim rejection based on discrepancies between invoice and purchase order.

Analysis:
The appeal challenged the rejection of a refund claim by the Commissioner (Appeals) Customs & Central Excise, Nagpur, which upheld the Order-in-Original rejecting the appellant's appeal. The case involved the appellant, engaged in manufacturing Industrial Valves, mistakenly invoicing a price of Rs. 3,64,495 instead of Rs. 36,495 per unit to M/s. Bharat Petroleum Corporation Ltd. (BPCL). This error led to an excess payment of Rs. 54,054 in duty, for which a refund claim was filed. The claim was denied due to discrepancies in goods descriptions between the invoice and purchase order. The appellant contended that despite the variation in details, the goods were the same, and the excess duty payment was evident from documents like ARE-1 monthly returns. They obtained a letter from BPCL acknowledging the mistake and confirming no excess payment was made. The appellant argued that the duty overpayment was acknowledged and rectified by BPCL, supporting their refund claim.

The appellant's counsel highlighted that the discrepancy in goods descriptions was due to BPCL providing specifications, while the appellant's invoice reflected their own specifications. They emphasized that the price quoted in the purchase order matched the actual price, contrary to the invoiced amount. Documents like a letter from BPCL, payment advice, and endorsement on the invoice supported the appellant's claim of excess duty payment and subsequent correction by BPCL. Despite discrepancies in details, the appellant demonstrated that the excess duty was acknowledged and rectified by BPCL, justifying the refund claim.

The Assistant Commissioner (A.R.) representing the Revenue reiterated the lower authorities' findings, emphasizing the discrepancies between the invoice and purchase order as the basis for rejecting the refund claim. However, the Member (Judicial) noted that while discrepancies existed in goods descriptions, the overpayment of duty was undisputed. The Member highlighted evidence, including a letter from BPCL and payment advice, confirming the erroneous invoicing, subsequent correction, and reduced payment made by BPCL. Based on the clear acknowledgment of the overpayment and rectification by BPCL, the Member concluded that the appellant was entitled to a refund for the excess duty paid. Consequently, the impugned order was set aside, and the appeal was allowed, granting the refund claim.