Transfer of excise credit between duty heads requires examination under the applicable circular before adjustment can be upheld.

A request to transfer credit lying under the Additional Excise Duty head to the Basic Excise Duty account required examination under the applicable Board circular before any adjustment could be treated as lawful. The lower appellate authority had not considered the assessee's separate application for transfer or its admissibility, so the matter was not finally resolved on the existing record. The impugned order was set aside and the issue was remanded for fresh decision after granting the assessee a reasonable opportunity of hearing.

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Issues: Whether the assessee's adjustment of Additional Excise Duty towards Basic Excise Duty, and its request for transfer of amount between the relevant heads of account, could be sustained without prior departmental permission.

Analysis: The assessee had made a separate application for transfer of the amount lying under the Additional Excise Duty head to the Basic Excise Duty account. That request was not considered by the lower appellate authority. The applicability of the Board's circular governing transfer of credit balance and the admissibility of the assessee's application had to be examined before the adjustment could be treated as lawful or ratified. Since that examination had not been undertaken, the matter required fresh consideration by the appellate authority after giving the assessee a reasonable opportunity of being heard.

Conclusion: The impugned order was set aside and the matter was remanded for fresh decision on the assessee's request for transfer of amount from the Additional Excise Duty account to the Basic Excise Duty account.

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