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2016 (6) TMI 405 - CESTAT NEW DELHI

2016 (6) TMI 405 - CESTAT NEW DELHI - 2016 (344) E.L.T. 623 (Tri. - Del.) - Adjustment of excess payment of duty towards short payment of duty ascertained at the time of finalisation of provisional assessment - Held that:- When there is provisional assessment, the same is applicable to the entirety of the goods and to arrive at final duty liability, adjustments of duty excess paid to the short payment have to be made. See Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE, LTU, Bangalore [2011 (10) T .....

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R Per: V. Padmanabhan: The appellant is engaged in the manufacture of man-made blended yarn and fabrics. Some quantity of these goods are sold by them to their sister concern. The assessable value for such clearances to sister concern is to be determined in terms of Rule 8 of the Central Excise Valuation Rules, 2000, 115%/ 110% of the cost of production ascertained on the basis of costing standard CAS-4. For this purpose clearances to the sister concern were assessed provisionally under Rule 7 o .....

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d by Revenue before the Commissioner (Appeals) who, vide order dated 13.06.2006 reversed the order and concluded that in terms of Rule 7(6) of the Central Excise Rules, 2002 the excess duty cannot be adjusted for duty short paid, before examining the unjust enrichment aspect in respect of clearances where duty was paid in excess. This order, in turn, has been challenged before us. The challenge is on the point that the requirement to examine the issue of unjust enrichment under Rule 7(6) of the .....

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the present appeal was considered alongwith two other matters involving the same question, by the Larger Bench who decided the issue in the case of Excel Rubber Ltd., vs. CCE, Hyderabad 2011 (268) ELT 419 (Tri. LB). The operative part of the decision of the Larger Bench is extracted below: 50. The fallout of the above discussion is that once the authority on finalisation of assessment finds any amount of money having been paid in excess of the duty liability ascertained in the final assessment, .....

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tly to be credited to the account of consumer benefit fund and only thereafter make an order of adjustment to the extent the amount is found to be actually refundable and not liable to be credited to the account of consumer benefit fund. Needless to say, that the burden of proof in this regard would be lie upon the assessee. The point for consideration is therefore answered accordingly . 3. Consequent upon the decision of the Larger Bench mentioned above the matter has come back before us for fi .....

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e Hon ble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE, LTU, Bangalore - 2012 (276) ELT 332 (Kar.) that the excess payment made during provisional assessment can be adjusted against the short payments made under the same provisional assessment. 5. Ld. DR reiterated the Larger Bench decision in the case of Excel Rubber Limited and argued that no such adjustment can be granted at the time of finalisation of provisional assessment without putting the excess a .....

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e, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. (2) The payment of duty on provisional basis may be allowed, if the assessee executes a bond in proper form with such surety or security in such amount as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, deem fit, binding the assessee for payment of difference between the amount of duty as may be finally assessed and th .....

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ng shown and the reasons to be recorded in writing, be extended by the Commissioner of Central Excise for a further period not exceeding six months and by the Chief Commissioner of Central Excise for such further period as he may deem fit. (4) The assessee shall be liable to pay interest on any amount payable to Central Government, consequent to order for final assessment under sub-rule (3), at the rate of twenty four percent per annum from the first day of the month succeeding the month for whi .....

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: Provided the amount of refund, instead of being credit to the Fund, be paid to the applicant, if such amount is relatable to (a) The duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other person, or (b) The duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person. This rule governs the grant and finalisation of provisional assessment. Sub-rule 7(3) casts the responsibility on the Assistant Commis .....

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duty short paid. The view held by the Larger Bench in the Excel Rubber Limited case is that before grant of adjustment the authority finalising the provisional assessment will have to ascertain whether such excess amount is to be actually refunded or is liable either wholly or partly to be credited to the Consumer Welfare Fund and only thereafter make an order of adjustment to the extent the amount found to be actually refundable. 7. However, this has been interpreted differently by the Hon ble .....

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provisional assessment order, if he is dealing with more than one goods, they have to be treated separately. Even though the duty payable under the Act is to be calculated under each head of each case ultimately it is the total duty payable for all the goods which are the subject matter of the provisional assessment and final assessment which is to be taken into consideration. If after taking into consideration the duty payable in respect of all the goods and the duty paid in pursuance of the f .....

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