2018 (1) TMI 1259 - AT - Central Excise

Jurisdiction - disallowance of recredit along with interest and imposition of penalties - rejection of the assessee s appeal by Commissioner (Appeals) on the ground that they were not within the jurisdiction to make suo moto entry of the wrongly paid duty - Held that - in the ordinary course, the appellant should have taken the permission of the jurisdictional Assistant Commissioner before reversing the entry or should have filed a refund claim, but appreciating that the said duty was admittedly wrongly paid and there is no dispute about the same, the recredit of the debit amounts to correction of the entries only. Inasmuch as the issue relates only to correcting the entries in RG23A Part II, the technical objection raised by the Revenue that they should have filed a refund claim would not sustain in the absence of any finding that such debit entry was otherwise not required to be made by the appellant. Appeal allowed.

Summary

Issues:
1. Correction of duty payment entries in CENVAT register without prior permission.
2. Disallowance of recredit along with interest and imposition of penalties.
3. Jurisdiction to make suo moto entry of the wrongly paid duty.

Analysis:
1. The appellant, engaged in manufacturing centrifugal fans and spares, inadvertently paid duty on trading transactions of electric motors and spares. They corrected the entries in their CENVAT register without prior permission, leading to a show cause notice proposing disallowance of recredit, interest, and penalties.

2. The original authority confirmed the proposal, which was upheld by the Commissioner (Appeals). The main contention for rejection was the lack of jurisdiction to make a suo moto entry of the wrongly paid duty. However, the Tribunal noted that the duty was wrongly paid, and the recredit amounted to a correction of entries, citing various precedents supporting this view.

3. The Tribunal referred to multiple decisions, including Union of India Vs. Annapurna Malleables Pvt. Ltd., highlighting that the correction of entries in the RG23A Part II register did not require a refund claim. The technical objection raised by the Revenue was deemed invalid, as there was no finding that the debit entry was unnecessary. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.