RG23A Part II debit reversal follows when duty is collected without authority on non-excisable goods.

Duty debited in RG23A Part II was treated as duty paid, but once the goods were held non-excisable and the levy lacked authority of law, the debit represented an amount collected without legal basis. The proper consequence was reversal of the RG23A Part II entry and restoration of the credit, so refund denial to that extent could not stand. Any objection relating to inadmissible Modvat credit on inputs was separate and had to be pursued independently under the law. The order below was modified accordingly, while leaving the department free to take lawful action on Modvat eligibility.

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Issues: Whether duty debited in RG23A Part II could be treated as duty paid and restored by reversal of the debit entry when the goods were held non-excisable, and whether refund of the amount was therefore admissible.

Analysis: The duty had been discharged through RG23A Part II. Once the goods were held to be non-excisable and the levy itself was found to have no legal basis, the amount debited in the RG23A account represented duty collected without authority. The proper course was restoration of the RG23A Part II entries by reversal of the debit. Any objection regarding inadmissible Modvat credit on inputs was held to be a separate matter and could be pursued independently under the law.

Conclusion: The assessee was entitled to restoration of the RG23A Part II debit and the denial of refund to that extent was not sustained.

Final Conclusion: The order below was modified to direct crediting back of the duty debited in RG23A Part II, while leaving the department free to take separate lawful action on Modvat eligibility.

Ratio Decidendi: Where a levy is held to have no authority of law and duty has been discharged through RG23A Part II, the debit entry is to be reversed and the amount restored, while any dispute on Modvat inadmissibility must be dealt with independently.

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