Registered dealer & duty payment!
DDT has received the following interesting question. Although the Netizen has answered it, he is not sure & hence wishes that readers of TIOL comment on the same.
Whether a registered dealer can pay by a TR -6 challan the Cenvat Credit incorrectly passed to their consignees who availed Cenvat Credit?
The Audit Wing of the Central Excise Department while auditing the records of a registered dealer found that the dealer had passed on as Cenvat credit the value of the Inputs sold by them. Upon pointing out this aberration, the Registered dealer requested that he be allowed to pay the said Cenvat credit quantum and that no action be initiated against the consignee manufacturers for he feared that he may lose his business. He also agreed to the fact that as a “registered dealer” he is liable to penalty in terms of rule 25 of the CER , 2002 for the above offence.
Consequently, he handed over a cheque of the said “incorrectly passed on Cenvat Credit”.
Should such a payment be accepted by the Audit group? The corollary to this question would be “Whether a registered dealer can make a payment in the first place of this Cenvat quantum?
A dealer of excisable goods gets registered under Rule 9 of the Central Excise Rules so as to issue Cenvatable invoices.
As per rule 4(1) of the Central Excise Rules, every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law ,…
Further, Rule 2(h) of CER , 2002 defines a “warehouse” as any place or premises registered under rule 9.
So also, Rule 2(c) defines “assessee” as any person who is liable for payment of duty assessed or a producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored and includes an authorized agent of such person;
A combined reading would lead one to conclude that even a registered dealer who is registered under rule 9 is an assessee who can pay the Cenvat incorrectly passed on by him.
To conclude, the payment made by the registered dealer can very well be accepted by the Audit officials.
Any differing view???