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2008 (9) TMI 321 - AT - Central ExciseAdjustment of demand with the refund - excess duty has been paid in one unit which is equivalent to the differential duty demanded in respect of the second unit - Both the units belong to the same manufacturer - The appellant explained the reasons by mistake in deposit excess duty in one unit and less duty in another unit - We find the duty paid in excess in one unit is to be adjusted against the deemed differential duty and against the other unit of the assessee adjustment allowed but appellant can not apply for refund after adjustment.
Issues: Appeal against demand confirmation and penalty imposition for mispayment of duty between two manufacturing units.
In this case, the appellant, engaged in cement and clinker manufacturing with units at Narsingarh and Imlai, filed an appeal against an order confirming a demand of Rs. 12,46,522/- and imposing a penalty. The issue revolved around the appellant mistakenly depositing duty amounts in the wrong accounts for the two units. The Narsingarh unit was supposed to pay Rs. 39 lakhs and the Imlai unit Rs. 27 lakhs through PLA, but the appellant interchanged the payments. The revenue contended that excess duty payment required a refund, while the appellant argued that the excess payment from Imlai unit could offset the differential duty owed by the second unit. The tribunal found that the excess duty paid by one unit could be adjusted against the differential duty demanded from the other unit, both belonging to the same manufacturer. The tribunal set aside the impugned order, allowing the appeal and denying the refund of excess duty paid by the Imlai unit. This judgment highlights the importance of correctly allocating duty payments between manufacturing units and the possibility of adjusting excess payments against differential duties within the same entity. It clarifies the obligations of the appellant in such situations and the authority's role in ensuring the correct payment and adjustment of duties. The decision emphasizes the need for accuracy in duty payments and the consequences of errors in payment allocation.
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