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2023 (5) TMI 861 - AT - Central ExciseValuation - adjustment of excess excise duty paid against the short payment - whether identical category of goods stock transfer is sold to the independent buyers and if so at what value? - Interest - penalty - HELD THAT:- The methodology explained by the Appellant for valuation of goods as per Rule 4 by making adjustment as to the grade of the finished goods cleared to the job workers, appears to be correct. Thus, at the first instance, duty was correctly paid by the Appellant. Even otherwise, on consideration of report of the jurisdictional Assistant Commissioner, arriving at the transaction value of goods cleared by the Appellant in the form of a number of annexures and by working out the short/ excess payment of duty by the Appellant, it emerges that in overall, the Appellant has paid much more duty than what is confirmed by the order appealed against. This bench finds that the approach of the Ld. Commissioner in confirming the demand by considering the annexures relating to short payment of excise duty alone is legally erroneous. The Ld. Commissioner ought to have allowed the adjustment of excess excise duty paid against the short payment, prior to raising any demand on the Appellant. The long range of judgments referred to by the Appellant wherein such adjustment has been allowed in the context of identical matters, matters involving CAS-4 valuation, matters involving provisional assessment and matters involving SSI exemptions are agreed upon - reliance placed in the case of THE PRINCIPAL COMMISSIONER CGST AND CENTRAL EXCISE HEADQUARTERS BHOPAL VERSUS M/S GODREJ CONSUMER PRODUCTS LTD. [2019 (5) TMI 222 - MADHYA PRADESH HIGH COURT] wherein the Hon’ble High Court upheld the Tribunal’s order holding that The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to be considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable. It is observed that demand raised vide the impugned order is not sustainable as during the relevant period the Appellant had paid the correct duty arrived at in terms of Rule 4 of the Valuation Rules. Moreover, the Appellant has paid much higher duty than what is demanded in the impugned order and in such factual circumstances, adjustment of excise duty must have been allowed instead of raising any further demand. Interest - penalty - HELD THAT:- As duty demand is not sustainable, there arises no question of sustaining the demand for penalty or interest. The impugned order cannot be sustained and is accordingly set aside. The appeal filed by the Appellant is allowed.
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