2004 (3) TMI 141 - AT - Central Excise

Demand - Excess and short payment of duty - whether the assessee can adjust excess amounts paid with lesser amounts paid after crossing the SSI exemption limit, as per Notification No. 1/93, dated 28-2-93 as amended - HELD THAT - In the present case, if such adjustment no duty demand arises. The same view was expressed by the Tribunal in the case of Kothari Pouches Ltd. v. CCE 2003 (7) TMI 503 - CESTAT, NEW DELHI , in the light of the decision of the Apex Court, rendered in the case of Divya Enterprises Ltd. 2003 (3) TMI 108 - SC ORDER . In the case of Divya Enterprises Ltd., Apex Court has clearly held that the demands raised on terry towelling fabric can be made adjusted for the duty paid on the towels. Therefore, in view of this Apex Court ruling, there cannot be any doubt with regard to the powers of the officer to make adjustments and raise the demands at the end of the financial year or at the time of issue of show cause notice. Similar view was expressed by the Apex Court in the case of Serai Kella Glass Works (P) Ltd. v. CCE 1997 (4) TMI 74 - SUPREME COURT . It was also rendered in terms of Rule 173-I. Therefore, in terms of citations referred to, we are of the considered opinion that the appellants were entitled to set off/adjustment against the excess payment and it is not the Revenue's case that on such adjustment still demands are subsisting. As no demands subsist, as such the appellants claim is required to be accepted. The impugned orders are therefore not legal and proper in term of the citations referred to and hence they are set aside and appeals are allowed with consequential relief, if any.

Summary

Issues involved:
The issue involves whether the assessee can adjust excess amounts paid with lesser amounts paid after crossing the SSI exemption limit, as per Notification No. 1/93, dated 28-2-93 as amended.

Summary:

Appeal No. E/1858/99:
The Assistant Commissioner confirmed duty demands on the ground of short payment due to paying duty at a lower rate after crossing the SSI exemption limit. The appellants argued they rectified the error within three months and paid the correct duty amount. The Commissioner rejected their plea, stating duty adjustments cannot be made on a financial year basis. The Tribunal held that appellants are entitled to ask for setoff and the Department must calculate excess and underpayments to raise any remaining duty demand.

Appeal No. E/1859/99:
A demand was raised for short payment as the appellants paid duty at a lower rate. They argued they had paid excess duty in subsequent months and sought adjustment. Both authorities rejected their plea. The Tribunal, citing previous judgments, held that adjustments can be made against excess payments, and no duty demand arises in such cases.

The Tribunal concluded that the appellants were entitled to set off/adjustment against excess payments, as no demands were subsisting. The impugned orders were set aside, and appeals were allowed with consequential relief, if any.

Separate Judgement by the Tribunal:
The Tribunal highlighted that the appellants were entitled to set off/adjustment against excess payments, as per legal precedents. As no demands subsisted, the appellants' claim was accepted, and the impugned orders were set aside, allowing the appeals with any consequential relief.