2011 (3) TMI 396 - AT - Central Excise

Refund - duty paid mistakenly twice by debit in Cevat amount - However instead of cutting and overwriting the said second time debit entry, the appellant debited the second time paid duty from the sum total of the credit available and arrived at the correct figure in their RG 23A Part-II, at the end of the month itself - Such corrected RG 23A Part-II was submitted before the authorities along with the returns required to be filed by the assessee - Correction was only rectifying the clerical mistake, result of the arithmetical errors - Correction not requiring any lis between the parties.technical view that even in such cases where admitted wrong entries are made and are rectified immediately thereafter, an assessee is required to file refund application is to shake the assessee s faith in the judicial system - Hence, the Larger Bench decision of the Tribunal in the case of BDH Industries Ltd. 2008 -TMI - 30889 - CESTAT MUMBAI is not appropriate in as much as in the present case the mistake was rectified immediately in the same month - Decided in favour of assessee.

Summary

Issues: Correction of clerical mistake in cenvat register leading to initiation of proceedings for suo-motu credit and requirement of filing a refund application.

Analysis:

1. Correction of Clerical Mistake in Cenvat Register:
- The appellant, engaged in the manufacture of Pre-stressed Mono-block Concrete Sleepers for Railways, cleared goods to the Railways under different invoices. A supplementary invoice was raised for differential VAT amount, inadvertently including the excise duty already paid.
- The appellant corrected the entry in their cenvat register before filing relevant documents with the authorities, rectifying the clerical mistake and arriving at the correct closing balance of cenvat credit for the month of December 2007.

2. Initiation of Proceedings for Suo-Motu Credit:
- Proceedings were initiated against the appellant, alleging that instead of filing a refund application for the correction made in the cenvat register, they should have taken the refund on their own. A show cause notice was issued, dropped by the original adjudicating authority, but later accepted by the Commissioner (Appeals) leading to the present appeal.

3. Judgment and Decision:
- The facts were not in dispute, and it was observed that the appellant rectified the clerical mistake immediately by adjusting the double-debited duty from the available credit before filing the correct RG 23A Part-II with the authorities.
- The Tribunal found that the correction made was a mere rectification of arithmetical errors, not requiring a formal refund application. It was emphasized that in cases of admitted mistakes promptly rectified, the need for a refund application would undermine the faith of the assessee in the judicial system.
- The Tribunal set aside the order of the Commissioner (Appeals) and restored the decision of the original adjudicating authority, highlighting that the correction was made promptly within the same month before filing documents with the authorities.

4. Legal Precedent and Conclusion:
- The Tribunal distinguished the present case from the Larger Bench decision relied upon by the Commissioner (Appeals), emphasizing the immediate rectification of the mistake before submission of documents to the authorities. The judgment aimed to uphold the principle that rectifying admitted errors promptly should not necessitate a formal refund application, preserving the integrity of the judicial process.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad highlights the correction of a clerical mistake in the cenvat register, the initiation of proceedings for suo-motu credit, the requirement of a refund application, the Tribunal's decision, and the legal precedent considered in reaching the final conclusion.