1994 (5) TMI 98 - AT - Central Excise

Summary

Issues:
1. Interpretation of Central Excise law regarding deemed transfer of P.L.A. amount to RG-23 account and its utilization.
2. Correctness of ordering crediting an equivalent amount in P.L.A. after deemed transfer.
3. Legality of ordering deemed transfers and utilizations not supported by Central Excise law.
4. Authority of CEGAT to relax provisions of Central Excise Law.

Analysis:
1. The case involved M/s. Hira Cement Works wrongly transferring duty paid Credit from RG-23 Account to their Personal Ledger Account (P.L.A.) instead of debiting it for duty payment. The Collector (Appeals) directed them to rectify this by depositing the amount in P.L.A. and transferring it back to RG-23 Account for duty payment. The Tribunal held that the transfer of Credit to RG-23A Account was impermissible under Rule 57H(3) and that the amount was still in P.L.A. The Tribunal deemed the transfer of Credit from P.L.A. to RG-23 Account for duty payment, allowing the benefit due to M/s. Hira Cement Works as per the appellate order of August 1985.

2. The Tribunal found that the order for crediting an equivalent amount in P.L.A. after the deemed transfer was necessary to rectify the initial accounting irregularity committed by M/s. Hira Cement Works. The Tribunal emphasized that the order aimed at proper accounting of the Credit and debit for duty payment, in line with the Collector (Appeals) directive. The Tribunal clarified that the irregularity was in transferring Credit to P.L.A. instead of debiting it from RG-23 Account for duty payment.

3. The Tribunal justified its decision by stating that the order was not beyond the provisions of the law and was essential for rectifying the accounting mistake made by M/s. Hira Cement Works. The Tribunal emphasized that the order was a procedural step to ensure proper utilization of the duty paid Credit and was supported by the Statute. The Tribunal rejected the contention that the order conflicted with legal provisions, highlighting that it aimed at correcting the accounting irregularity and enabling M/s. Hira Cement Works to utilize the Credit for duty payment.

4. The Tribunal dismissed the Reference Application by the Collector of Central Excise, Bhubaneswar, stating that no question of law requiring a reference to the High Court had arisen. The Tribunal emphasized that the order was a matter of accounting procedure to rectify the initial mistake made by M/s. Hira Cement Works in transferring Credit to P.L.A. instead of RG-23 Account for duty payment. The Tribunal cited a Supreme Court judgment to support its decision, highlighting the distinction between form and substance in such cases.