2018 (5) TMI 1405 - AT - Central Excise

Correction of duty demanded due to error made by the Department in computation - Department though admitted the mistake in calculation but refused to correct the same on the ground that there is no provision in law - Held that - the appellant paid the duty along with interest before the issue of SCN but due to calculation error, the appellant paid the excess duty to the extent of ₹ 1,86,463/- - the Department vide its letter dated 25.04.2017 has accepted the error but they have refused to correct the same and rather the impugned order was passed dismissing the appeal of the appellant on time-bar whereas the fact of the matter is that the assessee has filed the appeal against the letter dated 25.04.2017 refusing to correct the mistake committed by the Department. Once the Department has accepted the mistake then it was the bounded duty of the Department to correct the calculation error, refusal to do so is not tenable under law. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Time-barred appeal against rejection of duty exemption claim under Notification No. 63/95 CE dated 16.03.1995 due to calculation error in duty rate computation for excisable goods supplied to HAL.

Analysis:

Issue 1: Time-barred Appeal
The appeal was directed against the rejection of the appellant's claim for duty exemption under Notification No. 63/95 CE dated 16.03.1995. The Commissioner (Appeals) had rejected the appeal as time-barred, citing the date of the original impugned order as 24.03.2014. However, the appellant contended that the appeal was filed against the letter dated 25.04.2017, which refused to correct the calculation error made by the Department. The Tribunal found that the rejection on the grounds of being time-barred was erroneous as the appellant had timely appealed against the refusal to correct the mistake by the Department.

Issue 2: Calculation Error in Duty Computation
The appellant had manufactured and supplied excisable goods to HAL under duty exemption claimed under Notification No. 63/95 CE dated 16.03.1995. However, a calculation error was identified in the duty computation, where the Department had erroneously applied a duty rate of 12.36% instead of the correct rate of 10.30% for the period from 01.01.2012 to 16.03.2012. Despite the appellant pointing out this error at various stages, the Department admitted the mistake but refused to correct it, citing a lack of provision in law. The Tribunal held that once the Department had acknowledged the calculation error, it was obligated to rectify it. The refusal to correct the mistake was deemed untenable under the law.

Final Decision:
The Tribunal set aside the impugned order, allowing the appeal of the appellant. The Department's refusal to rectify the calculation error in duty computation, despite admitting to the mistake, was found to be unsustainable. The rejection of the appeal on the grounds of being time-barred was deemed incorrect, as the appeal was timely filed against the refusal to correct the error by the Department. The Tribunal ruled in favor of the appellant, emphasizing the Department's duty to rectify acknowledged mistakes in duty calculations.