2017 (3) TMI 1132 - AT - Central Excise

Payment of excess duty wrongly - Adjustment of the accounts from Head of Account BED to Head of account SED - appellant claim that due to certain unintentional clerical errors in the preparation of TR6 challans there was excess payment of ₹ 12,07,516/- under the Head of account of BED on MS and short payment to the extent of ₹ 11,80,645/- under the Head of account of SED on MS and excess payment ₹ 17,643/- under the Head of account of AED on MS - Held that - Both the duties are collected under Section 3 of the Central Excise Act. Different heads of account are but only administrative mechanisms for the purpose of proper accounting. It would be too harsh to not allow the prayer of the appellants merely on the ground that there are two duty heads of accounts for procedural purposes - the concerned authorities are directed to allow the adjustment prayed for by appellant after verification of the challans concerned - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Adjustment of excess payment of duty under different heads of account; Alleged short payment of duty due to clerical errors; Imposition of penalty for non-payment of duty; Bona fide mistake in depositing duty amount; Authority's discretion in directing payment; Tribunal's jurisdiction to allow duty adjustment.

Analysis:

Adjustment of Excess Payment of Duty:
The appellant installed a new software system and unintentional clerical errors led to excess payment of Basic Excise Duty (BED) while there was a short payment of Special Excise Duty (SED). The Tribunal noted that both duties were collected under the Central Excise Act and different heads of account were administrative mechanisms for accounting. Citing precedents, the Tribunal held that procedural errors should not prevent adjusting payments between duty heads, emphasizing the need for proper accounting without penalizing minor mistakes.

Imposition of Penalty for Non-Payment of Duty:
The Tribunal observed that there was no intention to evade duty payment, as the total duty amount was transferred to the government, albeit with a mistake in specifying the correct code for Special Excise Duty. Referring to circulars permitting credit balance transfer between minor heads, the Tribunal concluded that there was no default in duty payment, ruling out penalty imposition due to the absence of mala fide intent.

Bona Fide Mistake in Deposit and Authority's Discretion:
Acknowledging the appellant's bona fide mistake in depositing Basic Excise Duty instead of Special Excise Duty, the Tribunal held that the appellant should not be required to repay the amount. Instead, the authority could facilitate the transfer of the amount to the correct accounting code to maintain duty liability records accurately, emphasizing the importance of proper documentation over penal measures.

Tribunal's Jurisdiction to Allow Duty Adjustment:
Citing various judgments, the Tribunal directed the concerned authorities to permit the adjustment requested by the appellant after verifying the challans, in line with legal provisions and previous decisions. By setting aside the impugned order, the Tribunal allowed the appeal and granted consequential reliefs, emphasizing the importance of substantive justice and adherence to legal procedures in duty adjustments.

In conclusion, the Tribunal's judgment focused on rectifying unintentional errors in duty payments, emphasizing the need for fair treatment, proper accounting, and discretion in addressing mistakes without imposing penalties for genuine errors.