2014 (12) TMI 324 - AT - Central Excise

Adjustment of duties - excess payment in one account code and less payment in other accounting code - Rule 8(3A) of Central Excise Rules 2002 - Held that - Commissioner being in charge of the appellant-EOU, handling both Excise and Customs work, could make adjustment of short paid Central Excise duty against education cess paid in excess. It held that he amounts had been paid to the Central Government under different heads and such payment was not in dispute. The Tribunal directed the jurisdictional Commissioner to make adjustment between the short and excess payments and consider refund of balance amount after adjustment subject to filing of claim therefore - if there is an excess payment in one category of duty and there is short payment in another category both can be adjusted - there was short payment of central excise duty and excess payment of education cess and in this case it is the other way round - appellant has made out a prima facie case for waiver. Accordingly the requirement of pre-deposit is waived and stay against recovery is granted - Stay granted.

Summary

Issues:
1. Utilization of CENVAT credit for payment of education cess
2. Adjustment of excess payment in one category against short payment in another category
3. Interpretation of Circular No. 4/93-CX.8 and relevant case laws

Issue 1: Utilization of CENVAT credit for payment of education cess

The case involved a dispute regarding the utilization of CENVAT credit for the payment of education cess. The Revenue contended that the appellant had utilized CENVAT duty paid on raw materials for education cess, resulting in short payment of education cess. The appellant argued that the mistake was acknowledged, and they had paid the short amount subsequently. The appellant relied on Circular No. 4/93-CX.8 and a decision by the Hon'ble High Court of Kolkata to support their case. However, the Tribunal referred to a previous case where it was held that such adjustment was not possible. The Tribunal emphasized that the issue was not about the adjustment of excess payment but about the specific case of short payment of education cess.

Issue 2: Adjustment of excess payment in one category against short payment in another category

The Appellate Tribunal, in its impugned order, allowed the adjustment of short paid Central Excise duty against education cess paid in excess. It directed the jurisdictional Commissioner to make the adjustment and consider a refund of the balance amount after adjustment, subject to a refund claim. The Tribunal cited a decision by the Hon'ble High Court of Kolkata, which clarified that adjustments between excess payments in one category and short payments in another category were permissible.

Issue 3: Interpretation of Circular No. 4/93-CX.8 and relevant case laws

The Tribunal considered Circular No. 4/93-CX.8, which allowed for the transfer of balance from one duty head to another upon application by the manufacturer. Additionally, the decision of the Hon'ble High Court of Kolkata highlighted that adjustments between excess payments and short payments in different categories of duty were acceptable. The Tribunal, based on these interpretations, waived the pre-deposit requirement and granted a stay against recovery in favor of the appellant.

In conclusion, the judgment addressed the issues of CENVAT credit utilization, adjustment of payments in different categories, and the interpretation of relevant circulars and case laws. The Tribunal's decision was based on the specific circumstances of the case and the applicability of legal provisions and precedents.