M/s. Johnson Lifts Private Limited vs Commissioner Of G.S.T. And Central Excise

By this appeal, the assessee has challenged the rejection of its plea as to the appropriation of refund due to it in respect of one of its units against the demand in respect of its another unit.

2.1 The undisputed facts as could be gathered from the Appeal record are that the appellant opted for provisional assessments; that since the appellant, being a manufacturer, claimed that there were no sales involved at the time of clearance, it was paying duty on value, on cost construction basis in terms of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 for their Poonamallee, Butibory and Ambattur Units; that they had opted for provisional assessments; that the Department also issued provisional assessment order for all the units; that vide letter dated 09.10.2017, the appellant had stated that before finalization of their balance-sheet and differential ED, they had made the following advance payments towards the expected differential duty for all their three units, i.e :

Poonamallee : Rs. 1 Crore 01.10.2016

Butibory : Rs. 50 lakhs 14.11.2016

Ambattur : Rs. 50 Thousand 01.10.2016

2.2 It was the case of the appellant that they had also demonstrated the details of debit made in the CENVAT account page and further claimed that after finalization of their balance-sheet for the period 2016-17 and arrived at the differential ED payable in respect of the three units, as under:

Excise Duty

Poonamallee : Rs. 67,04,070/-

Butibory : Rs. 72,28,326/-

Ambattur : Rs. 2,35,892/-

2.3 They had also placed a detailed work sheet wherein they claimed that there was an excess payment of Rs. 32,95,930/- in their Poonamallee Unit, which is refundable to them by cash in terms of Section 142 [8 (b)] of the C.G.S.T. Act, 2017. Thus, vide letter dated 09.10.2017 the appellant sought for appropriation of the above refund amount towards the interest and duty in respect of its other units and also sought for refund of the balance of Rs. 6,40,235/-. All the above facts are part of the appellant's letter dated 09.10.2017.

In the adjudication proceedings, however, the Adjudicating Authority chose not to appropriate as pleaded by the assessee, but inter alia proceeded to demand the duty in respect of the Ambattur (appellant) unit vide Order-in-Original No. 01/2019 (DC)-PA dated 27.02.2019. The appellant having not met with success in its first appeal before the Commissioner of G.S.T. and Central Excise (Appeals-I), Chennai, has assailed the same by this appeal.

Ms. D. Naveena, Learned Advocate, appeared for the assessee-appellant and Shri M. Jagan Babu, Learned Authorized Representative, appeared for the Revenue respondent.

I have heard both sides and perused the documents placed on record as also the various case laws referred to during the course of arguments.

6.1 Undisputedly, the appellant's request for appropriation was made vide its request letter dated 09.10.2017. There is also a communication from the Deputy Commissioner, Poonamallee Divison that no refund claim was filed. Taking note of the above and considering the change in law with the introduction of C.G.S.T., the Commissioner (Appeals), Nagpur, while considering refund/adjustment claim of Butibori Unit out of excess duty available with Poonamallee Unit, has allowed the appropriation/adjustment of differential duty to be paid by the appellant's Butibori Unit against the excess amount of the appellant's Poonamallee Unit vide, Order-in-Appeal No. NGP/EXCUS/000/APPL/585/18-19 dated 29.03.2019. It is to be noted that since the appellant unit (Butibori) was under LTU, had there been no implementation of C.G.S.T. Act, 2017, then the appellant could have normally adjusted the differential Central Excise Duty in LTU. In fact, though this was brought to the notice of the First Appellate Authority, here in the case on hand, in the impugned order, the same has been ignored for the reasons best known to the First Appellate Authority. It is not the case of the Revenue that the above order is a subject matter of appeal or has been reversed by higher fora.

6.2 Admittedly, the excess duty paid by the appellant that has remained with the Revenue, has to be refunded to the appellant by following the due process of law as prescribed in the statute. In the peculiar facts of the case therefore, I deem it proper to set aside the impugned order and remand the case back to the file of the Adjudicating Authority to look into the refund due, as calculated by the appellant, and then appropriate/adjust excess duty of the Poonamallee Unit, if any, available thereafter towards duty and interest liability of the unit in appeal here, in terms with the findings and discussions of the Learned Commissioner (Appeals), Nagpur, to avoid inconsistency.

The appeal is disposed of on the above terms.

(Order pronounced in the open court on 15.03.2021)