2008 (5) TMI 50 - AT - Central Excise

Interest and penalty - appellant has paid Education Cess out of the amount paid as basis excise duty vide TR-6 challans revenue contend that correct head of account in TR-6 challans was not mentioned for the Education Cess amount since assessee has agreed to correct the entries in PLA by depositing the same amount under the head of Education Cess and crediting back the amount of Cess paid from the basic excise duty account, appellant cannot be held liable for payment of Education Cess again

Summary

Issues:
1. Incorrect payment of Education Cess using deposited amount meant for basic excise duty.

Analysis:
The appellant deposited an amount intended for basic excise duty but used it to pay Education Cess instead. The Revenue objected, citing accounting issues due to the incorrect head of account in the challans. However, it was acknowledged that the Education Cess was indeed paid from the deposited amount. The appellant agreed to rectify the entries by depositing the same amount under the correct head and crediting back the Cess paid from the basic excise duty account. The Tribunal found the appellant not liable for paying Education Cess again and granted an opportunity to make the necessary corrections through the jurisdictional Central Excise authorities.

The Tribunal deemed it unnecessary to confirm interest or impose a penalty on the appellant, considering the entire transaction was revenue neutral and the Education Cess had been paid. Consequently, the Tribunal set aside any potential interest or penalty charges. The stay petition and appeal were disposed of accordingly based on the above terms.

In conclusion, the Tribunal addressed the issue of incorrect payment of Education Cess using funds designated for basic excise duty. The appellant's willingness to rectify the accounting entries and the revenue-neutral nature of the transaction led to the Tribunal's decision to not hold the appellant liable for additional payment or penalties. The judgment provided a fair resolution by allowing the appellant to make the necessary corrections under the guidance of the Central Excise authorities.