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Judgment
K. Anpazhakan, Member (T)
The present appeal has been filed against the impugned order dated 11.10.2018 wherein the Ld.Commissioner(Appeals) has upheld the demands confirmed in the Order-in-Original dated 16.02.2017.
The appellant submits that the issue involved in the present appeal is of procedural in nature. There was an excess payment of duty in the month of December 2014 which they have utilized against the demand in the month of February 2015. However, the department interpreted it as if they have availed the excess credit suo motu and adjusted the same against their liability for the of month of February 2015, which is not permissible. Accordingly, the demand was confirmed by the adjudication authority along with interest and penalty and the same was upheld by the Ld. Commissioner (Appeals). In the impugned order, the Ld. Commissioner (Appeals) observed that there is no provision in the Central Excise Act or the Rules framed there under which empowered the appellant to take the credit on their own.
In their grounds of appeal, the appellant submits that it is not the case of availing re-credit of the excess payment. They are legally entitled to adjust the excess payment against the liability, if any, in the subsequent months. Accordingly, they submit that demand of duty along with interest and penalty imposed in the impugned order is not sustainable.
The Ld.Authorized Representative for the department reiterated the findings in the impugned order.
Heard both sides and perused the appeal documents.
I find that the appellant has made some excess payment in the month of December 2014. They have utilized the same against their liability in the month of February 2015 and reported the same in the return filed in the month of May 2015. The claim of the appellant is summarized by the Commissioner (Appeals) in the impugned order as under:
“d) Appellant claims that they had declared payments against their dues for December 2014 twice by mistake in the ER-1s and when detected they adjusted such double payment by showing deposit of duty vide the challan number ending with 90126 dated 09.02.2015 in the month of May 2015 and utilized such deposit in their account current towards payment of discharging the part dues pertaining to the month of February 2015.”
I find that the issue involved is of procedural in nature. There is no allegation in the impugned order that the appellant has not discharged their duty liability during February 2015. The impugned order alleges that excess payment, if any, in the month of December 2014 must have been adjusted immediately after the next month i.e. in the month of January 2015. However, the appellant has adjusted it against the liability in the month of February 2015, which is not permissible. I find that the appellant is permitted to adjust excess payment, if any, made on the subsequent month. There is no provision in the Rules that the adjustment must be made immediately after the next month. Hence, I find that there is no infirmity in the adjustment made by the appellant in the month of February 2015 and reporting the same in the return filed in the month of May 2015. Accordingly, I hold that the demand of duty along with interest and penalty imposed in the impugned order is not sustainable.
In view of the above discussion, I set aside the impugned order and allow the appeal filed by the appellant.