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2015 (7) TMI 180 - MADRAS HIGH COURT

2015 (7) TMI 180 - MADRAS HIGH COURT - 2015 (322) E.L.T. 885 (Mad.) - Refund / Abatement of duty - Commissioner (Appeals) was of the view lower Authority had passed an erroneous order while finalising the provisional assessment and failed to consider that Duty paid as per RT12 return - Held that:- Revised demand for higher duty is merely based on a presumption that one or other factor has not been considered by the Original Authority. When the show cause notice itself clearly demanded a sum of & .....

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proceeded to travel beyond the show cause notice to claim higher duty. The Department's plea that no fresh grounds have been brought in appeal before the Commissioner (Appeals) is erroneous, as we have already pointed out, in the appeal, as a first ground, they have raised a plea that RT12 returns were not considered, which is factually incorrect. - Decided against Revenue. - C.M.A. No. 2274 of 2007 - Dated:- 19-6-2015 - R. Sudhakar And K. B. K. Vasuki,JJ. For the Appellant : Mr. Rajnish Pathiy .....

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ered "provisional" for all issues relating to the determination of the correct assessable value and when only the factual discrepancies and ineligible abatements covered by the provisional assessment are sought to be rectified by the Commissioner (Appeals), whether the appellate Tribunal is right in holding that the Commissioner (Appeals) has travelled beyond the show cause notice? and (b) When the provisional assessments are covered by independent provisions and when no fresh grounds .....

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ling under Chapter 30 of the Central Excise Tariff Act, 1985. They were claiming abatement towards quantity discount, freight, cash discounts and turnover tax from the assessable value during the years 1992-93 to 1996-97. Since the actual abatements were known only at the end of the financial years, they resorted to provisional assessment. By a proposal for finalizing the provisional assessment for the said period, the assessee claimed refund of duty for a sum of ₹ 11,76,418.34 paid in exc .....

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he assessable value will be less and hence duty paid will also be less when compared to duty payable. But the assessee claims refund of duty based on the duty paid as per RT12 and duty payable, which is worked out as per the abatements allowable as per C.A certificate. It defies logic that though the abatements claimed is more than the abatements allowable the assessee still claims refund of duty. Hence the department chose to work out the duty paid, by deducting the abatements actually claimed .....

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79104708.50 77788637.25 1316071.25 In view of the above, M/s.Tablets India Limited are directed to show cause to the Deputy Commissioner of Central Excise, "C" Division, No.121, Mahatma Gandhi Road, Chennai - 600 034 within 30 days from the date of receipt of this notice as to why:- 1. The assessable value should not be re-determined and assessments should not be finalised by taking into consideration the assessable value and duty paid as reworked by the department. 2. Why the differe .....

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rom 1992-93 upto September 1996 along with Chartered Accountant's Certificate for the said period were submitted by the assessee. On perusal of the finalization proposals it was noticed that the abatements claimed was more than the abatements allowable as per the C.A.Certificate. In such case, when the abatements claimed was more than what was allowable, the assessable value will be less and hence duty paid will also be less when compared to duty payable. But the assessee in the finalization .....

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was less than the duty payable worked out the basis of CA Certificate. In view of the above, a show cause notice was issued to the assessee as to why the assessable value should not be re-determined and assessments should not be finalized by taking into consideration the assessable value and the duty paid as re-worked by the department. A differential duty of ₹ 13,16,071.25 was demanded in the show cause notice dated 12.09.2000." 4. After discussing elaborately on the Department's .....

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tions of the department adopted to arrive at the duty paid details incorporated in the Show Cause Notice is correct." 5. On the first issue, the Jurisdictional Authority held that the cash discount should be allowed only when claimed in the price lists and accordingly, upheld the working of the Department. Insofar as the second issue is concerned, he accepted the assessee's contention that the established practice of finalization of provisional assessment should be followed. However, he .....

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ntage on the sales made that allows these cash discounts as abatements. After taking into consideration the lower percentage of abatement on cash discount as per the C.A. certificate given in the workings of the dept and the assessee's workings and after giving allowances to certain clerical errors pointed out by the assessee in the assessable value relating to 1994-95, despite the difference in the duty worked out by the department in the annexures and summary of the SCN, the demand amount .....

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ich are as follows:- 1992-93 Rs.1,41,68,553/- 1993-94 Rs.1,54,49,847/- 1994-95 Rs.1,63,90,588/- 1995-96 Rs.1,94,99,910/- 1996-97 Rs.1,28,58,107/-(upto 9.96) Total Rs.7,83,67,005/- The above duty paid particulars does not include duty on free supplies of samples as in samples clearances, no abatements were claimed." 6. In the result, the Jurisdictional Authority passed the following order by dropping the proceedings. "I am of the opinion that the assessee has paid in excess of the exten .....

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a. I proceed to pass the following order ORDER I drop the demand proposed the Show Cause Notice in the light of the above observations. I finalise the provisional assessments for the years 1992-93 to 1996-97 (Sep.'96) in terms of Rule 9B of CER 1944 and the duty paid in excess determined on finalization is not refundable." 7. Not satisfied with the order passed by the Jurisdictional Authority, the Department pursued the matter by filing an application under Section 35E(4) of the Central .....

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gles during the period 1995-96 whereas the clearances were in 100s during the period 1994-95. But in the worksheet of the final assessment order, the clearances of the said product was taken wrongly which did not match with the correct quantity of Relasmin Injection resulting in loss of revenue of ₹ 5,93,857/-. The total freight allowed as abatement in the Order based on CA certificate was ₹ 91,15,218. Out of the said amount, ₹ 69,80,398/- represented the abatements such as Car .....

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Appeals), after hearing both sides, came to hold as follows: "12.I have gone through the records, arguments and submissions made in this case. I find that it is a fact that figures in the RT-12 Returns and working sheet attached to final assessment order are not matching. The Applicant Department has pointed out that the assessment order has failed to take into account the correct quantity of Relasmin Injection (2ml) cleared. I further find that the assessment order has proceeded on the bas .....

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ed for reconciliation of the said discrepancies, for which exercise, the matter requires to be remanded back to the lower authority. Ordered accordingly. 13. As regards the various abatements allowed by the ld lower authority, I am of the considered view that cartage and freight on depots, are eligible abatements so long as they represent the freight incurred from depot to the point of delivery as has been held in the case of MRF Ltd., 1995 (077) ELT 0433 SC. The ratio is equally applicable for .....

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vered under provisional assessment. Packing and forwarding charges form part and parcel of the cost of production and hence the same are includible in the assessable value. The lower authority will therefore be required to re examine these aspects with reference to the data available and pass such orders as deems fit. Ordered accordingly." 9. Aggrieved by the said order, the assessee pursued the matter before the Tribunal. The Tribunal, after taking note of the fact that the Jurisdictional .....

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both sides and considering their submissions, we have to accept the contention of the appellants that the lower appellate authority travelled beyond the scope of the SCN to hold in favour of the Revenue. The SCN had worked out the amounts of differential duty payable by the assessee for each financial year comprised in the period of dispute and had, accordingly, proposed to finalize the assessments and to demand total differential duty of ₹ 13,16,071.25 from the assessee. The assessments .....

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from what was proposed in the SCN, they should have issued an appropriate corrigendum to the said notice. It was not open to them to demand as differential duty a higher amount than what was demanded in the SCN, by way of an application under Section 35E(4) of the Central Excise Act against the order passed by the original authority in adjudication of the dispute arising out of the SCN. Hence the impugned order accepting the department's appeal against the Dy.Commissioner's order cannot .....

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ets and Chartered Accountant's certificate submitted by the assessee without taking into account the data available in the RT12 returns and other relevant documents filed by the assessee and therefore the lower Authority had passed an erroneous order while finalising the provisional assessment. The other grounds raised are quantification of freight charges to arrive at the revised figure of ₹ 31,71,218/-. 13. The primary ground on which the order of the provisional assessment was sough .....

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