2019 (4) TMI 1259 - AT - Central Excise

Excess of duty paid towards the scrap - whether excess of duty paid towards the scrap generated is just an adjustment or a claim for refund for which, an application is required? - HELD THAT - It is not a dispute that the registered job worker had paid the duty and it is not the case that there was also a similar situation of availment of re-credit by the job worker - the appellant had clearly mentioned about the necessary reversal in the cenvat register for the excess debit, which is only a reversal of book entry. This being so, there cannot be any question of refund as no duty is actually paid. The reversal entry made by the appellant is proper and in order in the given facts of the case - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of refund for excess duty paid towards scrap generated.

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the issue revolved around the denial of a refund by the Commissioner GST & Central Excise, Coimbatore, regarding the excess duty paid towards scrap generated. The key question was whether the excess duty paid was merely an adjustment or a legitimate claim for a refund requiring a formal application. The appellant had paid duty under the cenvat account on scrap cleared by a registered job worker, which had already suffered duty upon clearance at the hands of the job worker. The appellant sought re-credit in its register for this mistaken payment, arguing that it did not involve a refund.

Upon analyzing the facts and arguments presented, the Tribunal found that the registered job worker had indeed paid the duty, and there was no similar situation of re-credit by the job worker. The appellant had clearly communicated about the necessary reversal in the cenvat register for the excess debit, which was viewed as a mere reversal of a book entry, not an actual payment of duty. The Tribunal concluded that there was no question of a refund as no duty was actually paid, and the lower authorities had misunderstood the situation by not recognizing this as an account reversal despite the appellant informing the Revenue.

Consequently, the Tribunal held that the reversal entry made by the appellant was appropriate and in line with the case's facts. The show cause notice and subsequent orders denying the refund request were deemed to be not in accordance with the law and were set aside. The appeal was allowed, with any consequential benefits to be provided as per the law. The judgment was pronounced in open court on 8th February 2019.