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2023 (12) TMI 899 - AT - Central ExciseAdjustment of excess duty to that of duty short-paid during the period of provisional assessment - Applicability of principles of unjust enrichment to the amount excess paid before adjusting the same with the amount short-paid while finalising provisional assessment under Rule 7 of the Central Excise Rules, 2002. HELD THAT:- Undisputedly, the appellant has resorted to provisional assessment under Rule 7 of the Central Excise Rules, 2002 at the time of clearance of the goods from the factory to the depots, since certain conditional discounts passed on to the customers on sale from depots subsequently, the exact quantum of which is known only after its clearance from factory and sale from depots. When the exact amount of discount is ascertained, the admissible discounts are calculated on month-to-month basis and the assessable value at the time of clearance from the factory is redetermined and the duty payable is accordingly arrived at. Consequently, the difference between the duty paid and the duty payable is calculated and the assessment is finalized. The result of the said exercise may end up with recovery of differential duty short paid or refund of excess paid. The Revenue’s contention is that after determination of the exact duty payable on finalization of assessment, excess duty paid cannot be adjusted against duty short paid, without testing its incidence of excess duty whether passed on to any other person in compliance with the statutory presumption under section 12B of CEA, 1944. It is their argument that netting of duty by passing the statutory presumption is not laid down under Rule 7 of Central Excise Rules,2002. Accordingly, duty liability is calculated against the duty provisionally paid at the time of clearance of the goods from the factory and the amount payable - The Revenue’s objection is that the duty excess paid cannot be adjusted against the duty short-paid during a particular month/period of assessment to arrive at the net result of refund or liability. It is the Revenue’s contention that there is no specific provisions under Rule 7 of the Central Excise Rules, 2002 directing such adjustment/netting off duty. It has been brought to our notice that the said judgment of the Hon’ble Karnataka High Court in Sudhir Papers Ltd. vs. Commissioner of Central Excise, Bangalore-I [2011 (3) TMI 1443 - KARNATAKA HIGH COURT] has been accepted by the Revenue as communicated through their letter dated 17.11.2023. Needless to mention, the principle laid down by the jurisdictional High Court is binding on the Tribunal in view of the judgment of the Larger Bench of the Tribunal in the case of COLLECTOR OF CENTRAL EXCISE, CHANDIGARH VERSUS KASHMIR CONDUCTORS [1997 (7) TMI 186 - CEGAT, COURT NO. II, NEW DELHI]. The impugned order is set aside and the appeals are allowed.
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