2008 (10) TMI 224 - AT - Central Excise

Twice Payment of Duty Refund Period of limitation - assessee initially debited the amount from the Cenvat Account. Subsequently, they deposited the same amount in cash through TR-6 Challan in terms of the order of the Settlement Commission assessee approached the department for adjustment of excess paid - Held that - it cannot be treated as claim of refund under Section 11B of the Act. In other words, it is a case of adjustment of the amount of duty paid twice - It is not hit by limitation under Section 11B of the Act as it being merely an accountal adjustment

Summary

Issues:
Claim of SSI exemption for concessional rate of duty, excess duty collection, Section 11D of Central Excise Act, Settlement Commission application, re-credit of duty amount, appeal against re-credit decision, duty payment twice, refund claim, limitation under Section 11B, accountal adjustment.

Analysis:
The case involved the respondents, engaged in manufacturing Iron and Steel articles, claiming SSI exemption for a concessional duty rate. Allegations were made that they collected excess duty, invoking Section 11D of the Central Excise Act. The respondents deposited the excess amount through their Cenvat Account before a show cause notice was issued. Subsequently, they applied to the Settlement Commission in New Delhi to resolve the dispute. The Settlement Commission ordered the respondents to approach the Commissioner for re-crediting the amount previously deposited in cash. The Adjudicating Authority allowed re-credit of Rs. 3,65,850/- from the Cenvat Account, leading to a Revenue appeal before the Commissioner (Appeals), which was rejected, prompting the Revenue to appeal to the Tribunal.

The Revenue contended that the Adjudicating Authority's decision was akin to a refund order and cited a Delhi High Court case in support. On the other hand, the Advocate for the respondents relied on a Tribunal decision to support the Commissioner (Appeals) findings. Upon review, it was established that the respondents had indeed paid the duty twice. The Settlement Commission's directive to seek re-credit from the Commissioner was noted. The Revenue referenced a Supreme Court case to argue that the duty paid by the party should be handled under Section 11(B) of the Central Excise Act. However, the Tribunal found that the respondents had not claimed a refund but sought re-credit as per the Settlement Commission's order, indicating an adjustment of the duty paid twice rather than a refund claim under Section 11B.

In light of the Tribunal's precedent in a similar case, it was determined that the re-credit was a mere adjustment in the Cenvat Account, not subject to the limitation under Section 11B. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, rejecting the Revenue's appeal. The judgment was dictated and pronounced in open court on 15-10-2008.