2018 (2) TMI 1666 - AT - Central Excise

CENVAT credit - correction of wrong forwarding of closing balance of CENVAT account was corrected by passing journal voucher, but no document was produced - Held that - Inadvertently while transferring the closing balance as opening balance on 01.04.2010 the short amount of balance was transferred that too in the accounting records. However, in ER-1 return there is no discrepancy as correct closing balance of CENVAT as on 31.03.2010 was correctly shown as the same amount in the opening balance of April, 2010 in the ER- 1 return of April 2010 - there is only a clerical error while recording the opening balance in the Month of April, 2010. As such this is not a case of wrong availment of credit or excess availment of credit, therefore there is no question of any demand - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Discrepancy in recording opening balance in CENVAT account.
2. Demand of CENVAT credit raised due to journal voucher without documentary evidence.
3. Appeal against dropping of demand by Commissioner (Appeals).

Analysis:
1. The case involved a discrepancy where the appellant mistakenly recorded a short amount as the opening balance in their CENVAT account in April 2010. Although the error was corrected through a journal voucher, a demand for CENVAT credit was raised during an audit due to the lack of documentary evidence for the correction. The Adjudicating Authority confirmed the demand, but the Commissioner (Appeals) dropped it after considering the explanation and supporting Chartered Accountant certificate provided by the respondent.

2. The Revenue filed an appeal, arguing that the respondent did not submit any documentary evidence before the Adjudicating Authority to support the correction made through the journal voucher. The Additional Commissioner contended that only a Chartered Accountant certificate was submitted for the explanation of the discrepancy in the closing and opening balances, but no evidence was provided for the difference amount, leading to a request for setting aside the Commissioner (Appeals) order.

3. The respondent, represented by their counsel, argued that there was no wrongful availment of CENVAT credit, as the correct closing balance was recorded on 31st March and a clerical error led to the short opening balance on 1st April, which was rectified through the journal voucher. The respondent maintained that this was a case of a clerical error that was promptly corrected, with no excess availment of credit. The Commissioner (Appeals) decision was supported as being in line with the facts presented.

4. Upon review, the Member (Judicial) found that the closing balance of the CENVAT account on 31st March was accurate and correctly carried forward to the opening balance on 1st April. The discrepancy arose due to a clerical error in recording the opening balance in April 2010, which did not affect the ER-1 return where the correct balances were reflected. The judgment emphasized that this was not a case of wrongful or excess availment of credit, but a mere clerical error that was rectified promptly. The Chartered Accountant's certification further supported the correction made. Consequently, the Revenue's appeal was dismissed, and the Commissioner (Appeals) decision was upheld, with the cross objection also disposed of.