2026-VIL-1698-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cess on Tea paid under registration of sister unit - Cross-adjustment across distinct registrations - Appellant, a manufacturer of tea holding two Central Excise registrations, filed ER-1 returns for clearances from its expansion unit but, owing to an unintentional clerical error of its accountant, deposited the corresponding Cess on Tea under the registration of its sister unit - Department demanded the Cess under Section 11A under the registration of the expansion unit - Whether the Cess paid under the registration of the sister unit can be adjusted against the demand raised under the registration of the expansion unit - HELD - Cross-adjustment of statutory duty or cess across distinct registrations is not permissible under the provisions of the Central Excise Act, 1944 and the Rules framed thereunder. The contention of the Appellant that the amount already paid under the sister unit's registration ought to be adjusted against the demand has no merit - The Appellant is directed to pay the confirmed Cess on Tea along with applicable statutory interest in respect of the registration of the expansion unit. The Appellant is at liberty to claim a refund of the Cess deposited under the registration of the sister unit. In the interest of justice the statutory period of limitation for filing such refund application is to be reckoned from the date of receipt of a copy of the Order - Taking into account the fact that the mistake was due to a bona fide clerical error and that there was no intention to evade payment of duty on the part of the Appellant, no penalty is imposable - The penalty imposed under the impugned order is set aside - The demand of Cess with interest is upheld. The appeal is disposed of
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