2024 (1) TMI 517 - AT - Central Excise

Adjustment of excess payment against the liability, if any, in the subsequent months - HELD THAT - The appellant has made some excess payment in the month of December 2014. They have utilized the same against their liability in the month of February 2015 and reported the same in the return filed in the month of May 2015. The issue involved is of procedural in nature. There is no allegation in the impugned order that the appellant has not discharged their duty liability during February 2015. The impugned order alleges that excess payment, if any, in the month of December 2014 must have been adjusted immediately after the next month i.e. in the month of January 2015. However, the appellant has adjusted it against the liability in the month of February 2015, which is not permissible - the appellant is permitted to adjust excess payment, if any, made on the subsequent month. There is no provision in the Rules that the adjustment must be made immediately after the next month. There is no infirmity in the adjustment made by the appellant in the month of February 2015 and reporting the same in the return filed in the month of May 2015 - the demand of duty along with interest and penalty imposed in the impugned order is not sustainable - Appeal allowed.

Summary

Issues involved: Procedural nature of excess duty payment and adjustment against subsequent liability.

Summary:
The appellant filed an appeal against an order upholding demands confirmed in a previous order. The issue revolved around the appellant making an excess duty payment in December 2014, which they utilized against a demand in February 2015. The department viewed this adjustment as impermissible, leading to the demand being upheld with interest and penalty. The appellant contended that they were entitled to adjust the excess payment against subsequent liabilities, not for re-credit. The Commissioner (Appeals) summarized the appellant's claim as a mistake in declaring payments for December 2014 twice, adjusting the double payment in May 2015 against February 2015 dues.

Upon review, it was found that the issue was procedural, with no allegation of non-payment of duty in February 2015. The impugned order suggested the excess payment from December 2014 should have been adjusted in January 2015, but the appellant adjusted it in February 2015. It was determined that the appellant was allowed to adjust excess payments in subsequent months, with no requirement for immediate adjustment. Therefore, the adjustment made in February 2015 and reported in May 2015 was deemed permissible. Consequently, the demand for duty, interest, and penalty in the impugned order was deemed unsustainable.

As a result of the analysis, the impugned order was set aside, and the appeal by the appellant was allowed.