2016 (2) TMI 1002 - AT - Central Excise

Refund - Clerical mistake - Held that - Despite such mistake which has been admitted by the appellant if all the documents such as purchase order /invoices/ER-1 returns/debit notes and treatment given in the books of account are verified it can be clearly establish whether the appellant have paid the excess duty. On this basis if it is proved that the appellant have paid excess duty for which debit note was issued by the customer to the appellant then appellant is prima facie entitle for the refund claim - The adjudicating authority shall carry out proper verification of all the documents to find out whether the appellant have paid excess duty in respect of the goods cleared by them and on that basis refund should be reprocessed in accordance with law - Appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection due to clerical errors in invoices and ER-1 returns.

Analysis:
The appeal challenged the rejection of a refund claim amounting to Rs. 16,53,444 by the Commissioner (Appeals) based on discrepancies in the description of goods in invoices and ER-1 returns. The appellant had mistakenly charged higher prices for goods due to a software error, leading to a debit note from the customer for the excess amount. The appellant contended that despite clerical errors in documents, the fact of excess duty payment remained undisputed. The Revenue, represented by the Superintendent, upheld the rejection. The Member (Judicial) found that the lower authorities failed to determine whether excess duty was indeed paid by the appellant. Emphasizing that discrepancies in documents did not justify rejecting the refund claim, the Member highlighted the importance of verifying all relevant documents to establish the excess duty payment. The Member directed the adjudicating authority to conduct a thorough verification and reprocess the refund claim if it is confirmed that excess duty was paid. The appellant was granted a personal hearing during the reassessment process, which was to be completed within three months from the date of the order. The appeal was allowed for remand to the Original Adjudicating Authority for further review and verification.

This judgment underscores the significance of substantiating excess duty payment despite clerical errors in documentation. It highlights the need for a meticulous examination of all relevant documents to determine the refund claim's validity. The Member's decision to remand the case for a detailed verification process ensures a fair assessment of the appellant's claim. The directive for a personal hearing and a time-bound reassessment emphasizes procedural fairness and efficiency in resolving the dispute.