Revenue's appeal dismissed as refund claim valid for erroneously paid excise duty on cancelled invoice

The CESTAT Kolkata dismissed the Revenue's appeal against a refund order. The respondent had erroneously paid excise duty in April 2012 on an invoice for goods that were not actually supplied in full. A revised invoice was subsequently issued for the partial quantity actually supplied. The Tribunal held that since the Revenue did not dispute the discharge of duty on the revised invoice and could not establish that goods were moved under the cancelled invoice, the refund claim was valid. The Commissioner (Appeals) order allowing the refund was upheld as legally sound.

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Issues Involved:
1. Double payment of duty.
2. Non-intimation of invoice cancellation to jurisdictional authorities.
3. Basis of refund claim on affidavits and certificates.
4. Remarks indicating sales return.

Detailed Analysis:

1. Double Payment of Duty:
The respondent, a division of Tata Steel Ltd., inadvertently raised an invoice (No.200000000000097 dated 12.04.2012) indicating full purchase order value and corresponding tax. Upon realizing the mistake, the invoice was canceled the same day, and a new invoice (No.200000000000112 dated 13.04.2012) was issued with the correct values. The respondent discharged duty twice and filed a refund claim for the erroneously paid duty in October 2012. The adjudicating authority initially rejected the refund claim, but the Commissioner (Appeals) allowed it, noting that the goods under the original invoice were not cleared, and duty was paid from the Cenvat Credit account.

2. Non-intimation of Invoice Cancellation:
The department argued that the respondent failed to inform the jurisdictional Range Officer or the Assistant Commissioner about the invoice cancellation. However, the Commissioner (Appeals) held that non-intimation was not a fatal error that warranted rejection of the refund. The Tribunal supported this view, emphasizing that procedural lapses should not deny substantive benefits, especially when duty was paid twice.

3. Basis of Refund Claim on Affidavits and Certificates:
The department contended that the refund was based solely on affidavits and certificates, which is not provided for under Excise law. The Commissioner (Appeals) and the Tribunal found the documentation sufficient to establish the respondent's claim. The affidavits from the project manager and transporter, along with a certificate from Tata Steel Ltd. and gate register entries, confirmed that no goods were dispatched under the canceled invoice.

4. Remarks Indicating Sales Return:
The department noted that the "sales return" remark on the canceled invoice suggested the goods were cleared and returned. The respondent clarified that the goods never left the premises, supported by gate register entries and other documents. The Tribunal upheld this explanation, noting that there was no evidence to contradict the respondent's claims.

Conclusion:
The Tribunal dismissed the department's appeals, finding no infirmity in the Commissioner (Appeals)'s order. The Tribunal emphasized the principle that substantive benefits should not be denied due to procedural irregularities, especially when it is established that duty was paid without actual clearance of goods. The Tribunal also highlighted that the onus was on the department to prove that goods were cleared under the canceled invoice, which was not done in this case. The decision aligns with previous rulings that procedural lapses should not result in the denial of rightful refunds.

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