2009 (7) TMI 1055 - AT - Central Excise

Summary

Issues:
- Incorrect deposit of Education Cess instead of Basic Excise duty
- Demand of duty, interest, and penalty
- Rectification request for deposit mistake
- Utilization of deposited amount under Cenvat duty
- Justification of demand, interest, and penalty

Analysis:
The case involved the appellants, engaged in manufacturing Thermit Portion and Thermit Welding Equipments, who mistakenly deposited Rs. 2,00,000 under Education Cess instead of Basic Excise duty. A show cause notice was issued, demanding duty, interest, and penalty. The original authority and Commissioner (Appeals) upheld the demand. The appellant's advocate argued for rectification of the deposit mistake, citing correspondence with the department and a Tribunal decision in a similar case.

The Revenue representative reiterated the Commissioner (Appeals)' findings, emphasizing the irregularity of using Education Cess amount as Cenvat duty. After considering both arguments and the records, the judge noted the appellant's error in depositing under Education Cess, which should have been Basic Excise/Cenvat duty. The appellant's requests for rectification were acknowledged, and it was established that they were not eligible to avail Education Cess under Basic Excise/Cenvat duty, justifying the demand of duty.

The judgment highlighted that the appellants' deposit under Education Cess was utilized as Cenvat duty, with no response from the Chief Accounts Officer regarding rectification. As the appellants did not benefit from this error, interest payment was deemed unjustified. Additionally, since the amount was duly recorded, the imposition of penalty under Section 11AC of the Act was considered unwarranted. Consequently, the demand of duty was upheld, while the demand for interest and penalty was set aside, leading to the disposal of the appeal.