CX - What difference it makes whether it is industrial fans or components - when fact remains that excess duty was paid why refund claim should not be given to appellant – Matter remanded: CESTAT
By TIOL News Service
MUMBAI, JULY 18, 2016: DUE to software problem, while generating invoices from ERP system, value of goods manufactured and cleared was mistakenly charged on higher side by the appellant.
On realization of this mistake, the customerraised debit note to the appellant for the excess amount charged in the invoices and consequently, the appellant filed refund claim.
The original authority rejected the refund claim of Rs.16,53,444/- on the ground that in the invoices which are shown to be relevant for the purpose of refund claim, the description of the goods shown therein is 'Components' and purchase order also shows the description as 'Components' whereas in monthly ER-1 returns the clearance shown is of 'Industrial Fans'. Moreover, there is a mismatch of invoices and purchase order of the goods cleared, all the invoices bearing number KI-24 to KI-35 were generated on computer but number of invoices thereunder has been corrected by overwriting by hand.
The Commissioner (A) too rejected their appeal and so the assessee is before the CESTAT.
It is submitted that there is no dispute that excess duty was paid due to higher prices charged in the invoice due to software problem; that clerical error occurring in the documents will not negate the fact that excess duty has been paid; debit note issued by the customers itself shows that excess value was charged, accordingly excess duty was paid, which is required to be refunded.
The AR reiterated the findings of the impugned order.
The Bench observed –
"6. I find that both the lower authorities have not given any finding whether there is excess payment of duty in respect of goods manufactured and cleared by the appellant. No discussion was made on the debit note issued by the customer to the appellant. The refund claim was rejected on the ground that there is variation in the description of the goods shown in the ER-1 returns and in the purchase order/invoices of the goods. The appellant has stated that the description was wrongly mentioned in the ER-1 returns whereas the goods cleared is 'Components' and not 'Industrial Fan'. I do not understand what difference it makes whether it is industrial fans or components but when the corroborative documents itself established that the goods cleared is components but the facts remains if the excess duty was paid even on the components why refund claim should not be given to the appellant. As regard discrepancies pointed out by the lower authorities such as wrong purchase order number mentioned on the invoice, wrong description etc., these reasons are not sufficient to reject the refund claim of the appellant.
Despite such mistake, which has been admitted by the appellant, if all the documents such as purchase order/invoices/ER-1 returns/debit notes and treatment given in the books of account are verified, it can be clearly establish, whether the appellant have paid the excess duty. On this basis if it is proved that the appellant have paid excess duty for which debit note was issued by the customer to the appellant, then appellant is prima facie entitle for refund claim. However this exercise of proper verification of the documents has not been carried out by the original authority…."
The matter was remanded and the adjudicating authority was directed to conduct the denovo adjudication within three months.
(See 2016-TIOL-1762-CESTAT-MUM)
