Tribunal allows appeal, deems credit valid, no intent to evade duty

The Tribunal set aside the Commissioner (Appeals)'s order denying deemed credit of Rs. 71,351, ruling that there was no evidence of fraud, collusion, wilful misstatement, or intent to evade duty in the appellant's actions. The Tribunal found that the appellant rectified a mistake in duty payment upon audit's notice and that the initial error did not demonstrate intent to evade duty. As a result, the appeal was allowed in favor of the appellant.

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Issues:
Deemed credit denial based on duty short paid without intent to evade payment of duty.

Analysis:
The appellant contended that the deemed credit of Rs. 71,351 was denied without any finding of fraud, collusion, or wilful misstatement leading to duty short paid. The Commissioner (Appeals) did not allege or find any intentional fault in the duty short paid. The appellant argued that the denial of deemed credit was unjustified without material evidence supporting intent to evade duty.

The Revenue argued that the appellant's act of initially paying duty under a wrong notification, rectifying it upon audit's notice, and then not paying duty under the correct notification amounted to a contravention of Central Excise Act and Rules with intent to evade payment of duty.

The Tribunal found the Revenue's argument unacceptable, stating that a mistake does not imply intent to evade duty unless supported by material evidence. It noted that under the earlier notification, the appellant paid more duty than under the revised notification after taking deemed credit as advised by the audit. The Tribunal concluded that there was no evidence of fraud, collusion, wilful misstatement, or contravention of provisions with intent to evade duty. Consequently, the Commissioner (Appeals)'s order was set aside, and the appeal was allowed.

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