2016 (4) TMI 770 - AT - Central Excise

Whether appellant can defy payments of its own assessment done in the ER-1 and does not pay the entire duty assessed by him - Appellant filed a revised ER-1 return to argue that duty payable was actually less than what was calculated in the ER-1 return - Held that - no provision of the Central Excise law has been brought to the notice of the Bench whether any such adjustment can be done in the case of Central Excise duty payment. In the absence of any such provision in Central Excise, the correct method would have been to pay entire Central Excise duty as determined by the appellant under Self-Removal Procedure and if subsequently some refund is due the same could have been claimed by way of a refund claim under Section 11B of the Central Excise Act, 1944. Therefore, appeal filed required to be rejected. Imposition of penalty - Rule 27 of the Central Excise Rules, 2002 - Held that - there was some miscalculation done by appellant, therefore it is not a violation with intention to evade payment of duty. Therefore, penalty imposed is set aside. - Decided partly in favour of appellant

Summary

Issues:
1. Discrepancy in duty payment calculations and filing of revised return.
2. Provision for filing revised ER-1 return.
3. Imposition of penalty under Rule 27 of the Central Excise Rules, 2002.

Analysis:
1. The Appellant filed an appeal against the Order-in-Appeal upholding the Order-in-Original regarding a duty payment dispute from June 2007 to February 2008. The Appellant argued that although the original ER-1 indicated duty of ?29.60 Crore paid, the actual duty payable and paid was ?29,53,22,566/-. A Show Cause Notice was issued for differential duty payment of ?6,83,131/-. The Appellant filed a revised return, but it was rejected by lower authorities citing no provision for revised ER-1 filing. The Revenue contended that no provision exists for revised ER-1 filing and excess payments should be sought as refunds under Section 11B of the Central Excise Act, 1944. The Appellant's argument was supported by a case law reference, but the Tribunal found no provision allowing such adjustments, requiring full payment as assessed under Self-Removal Procedure, with any excess eligible for refund under Section 11B.

2. The central issue revolved around the Appellant's attempt to adjust duty payments based on their assessment in the ER-1 return by filing a revised return. The Tribunal highlighted the absence of any provision in Central Excise law for such adjustments, emphasizing the necessity to pay the entire duty assessed and subsequently claim any refund due under Section 11B. The Tribunal rejected the appeal on merit due to the lack of legal basis for the Appellant's actions, emphasizing compliance with the prescribed duty payment procedures.

3. Regarding the penalty imposed under Rule 27 of the Central Excise Rules, 2002, the Appellant argued that it was a bona fide calculation error, citing a relevant case law. The Tribunal acknowledged the calculation error but noted it was not intentional evasion, leading to the setting aside of the penalty. The Tribunal allowed the appeal only to the extent of overturning the penalty imposed under Rule 27, emphasizing the absence of deliberate violation in the duty payment discrepancy.

In conclusion, the Tribunal upheld the requirement for full duty payment as assessed, rejected the appeal on merit due to the lack of legal provision for adjustments, and set aside the penalty imposed under Rule 27 based on the absence of intentional evasion.