2010 (3) TMI 646 - AT - Central Excise

Payment of SED from BED through TR-6 - No demand confirmed under Section 11A of the Central Excise Act - Special Excise Duty can be paid from the account of Basic Excise Duty.

Summary

Issues:
1. Whether Special Excise Duty can be paid from the account of Basic Excise Duty.

Analysis:
The Appellant filed an appeal against an order directing them to deposit a specific amount as Special Excise Duty (SED) within three months. The Appellant contended that there was no demand confirmed under Section 11A of the Central Excise Act and no prohibition for payment of SED from the Basic Excise Duty account during the relevant period. The Commissioner found that the Appellant had paid duty through TR-6 Challans showing Basic Excise Duty, but also paid SED. The Appellant argued that the order was not sustainable, citing a Board's Circular allowing the utilization of credit of specified duties for payment of any specified duty. The Revenue, however, relied on the same Circular, emphasizing the separate accounting of credits and utilization for proper revenue accounting.

The Tribunal analyzed the issue and found no prohibition under the Central Excise Act or Rules for paying SED from the Basic Excise Duty account. They referred to a previous Tribunal decision where a similar situation was resolved by depositing the amount in the PLA through TR-6 Challan and crediting back the amount paid from the Basic Excise Duty account. In the present case, as there was no demand confirmed under Section 11A of the Act, and the duty in question had been paid through PLA, the Tribunal held that the Appellant had neither gained nor the Department lost any amount. Consequently, the Tribunal set aside the impugned order directing the deposit of SED and allowed the appeal, disposing of the cross-objection as well. The judgment clarified that there was no prohibition for paying SED from the Basic Excise Duty account, leading to the decision in favor of the Appellant.