TMI Blog2017 (3) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... ty against short paid duty is permissible for the entire year i.e. 2003-04 at the time of finalization of the assessment - appeal allowed - decided in favor of assessee. - E/2835/06 - A/86093/17/SMB - Dated:- 28-2-2017 - Mr. Ramesh Nair, Member(Judicial) Shri. Prakash Shah, Advocate for the Appellants Shri. S.V. Nair, Asstt. Commissioner(A.R.) for the Respondent Order This appeal is directed against the No. Order-in- Appeal No. P-I/157/2006 dated 27-4-2006 passed by the Commissioner (Appeals), whereby the Ld. Commissioner (Appeals) rejected the appellant s appeal. The facts of the case are that the appellant has opted for provisional assessment for the year 2003-04 of their final products sold thru their depots/consignment agents, consumed captively for the manufacture of other final products and transferred of goods to their own other factory at Mahad for further manufacture. The provisional assessment was finalised by the proper officer, i.e. the jurisdictional Assistant Commissioner vide order F. No. 171/TX/03/1132 dated 28-4-2005. In the said final assessment order, the assessing authority raised demand of duty of ₹ 37,25,811/- on comparison of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od. 4. I have carefully considered the submissions made by both sides and perused the record. 5. I find that provisional assessment was done in the present case on the clearances which involve the sale of goods not only depot clearance but also captive consumption therefore valuation of the goods is on the basis of cost construction method. The value of the goods is arrived on the basis actual data of the entire financial year therefore value is not determined on each consignment basis. The provisional assessment is provided under Rule 7 of Central Excise Rules, 2002, which is reproduced below: Rule 7. Provisional assessment . - (1) Where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not passed on the incidence of such duty to any other person. In view of above provision of provisional assessment, it is clear that at the time of the finalization of the assessment, total duty paid/payable has to be taken in to account and if there is net amount either short paid or excess paid only that amount will be available either for recovery or refund. Therefore final assessment is done in consolidation in respect of clearances made in particular financial year. There is no specific provision in Rule 7 that finalization of assessment shall be done either on consignment basis or monthly basis. Therefore in my considered view, the Asstt. Commissioner, suo-moto assessing the duty on monthly basis and wherever there is short payment, demand was raised ignoring the excess paid duty is not permitted in terms of provisional assessment as provided under Rule 7 of Central Excise Rules, 2002. This issue has been dealt with in detail in various judgments cited by the Ld. Counsel. The relevant orders of the various judgments are re-produced below: Toyota Kirloskar Auto Parts Pvt Ltd(supra) 5. The substantial question of law which arises for consideration in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , till the date of payment thereof. (5) Where the assessee is entitled to a refund consequent to order for final assessment under sub-rule (3), subject to sub-rule (6), there shall be paid an interest on such refund at the rate specified by the Central Government by notification issued under Section 11BB of the Act from the first day of the month succeeding the month for which such refund is determined, till the date of refund. (6) Any amount of refund determined under sub-rule (3) shall be credited to the Fund : Provided that the amount of refund, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to - (a) the duty of excise paid by the manufacture, 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. 7. A perusal of the aforesaid provision makes it clear that, where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the competent authority as provided in the said provision, to permit him to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions, it is only when the duty is due and it is not paid within the stipulated time and the duty is paid thereafter, in order to compensate the revenue, interest is imposed. If that is to be kept in mind, in the instant case, when the assessee has paid a sum of ₹ 1,66,56,740/- excess duty which is entitled to claim refund, he cannot be taxed with payment of excess duty in the form of interest. The entire approach of the department is unreasonable, contrary to the scheme of the Act and negatives the principle underlying these provisions. Therefore, all the authorities were in error in levying and upholding the levy of interest. In that view of the matter, we pass the following : ORDER 10. The Appeal is allowed. The impugned order passed by all the authorities are hereby set aside. The substantial question of law framed in this appeal is answered in favour of the assessee and against the revenue. No costs. Hindustan Zinc Ltd(supra) 37 . As the facts of this case are similar to the facts in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. (supra) therefore, the decision of the Larger Bench of this Tribunal in the case of Excel Rubber Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue's appeal against the same order dated 11/03/05 of the Deputy Commissioner could not be entertained by the Commissioner (Appeals) and, as such, the Commissioner (Appeals)'s order dated 30/11/07 is invalid and, hence, is not sustainable. Therefore, the appeal No. E/490 of 2008 filed by the assessee is allowed. 7. As regards the Revenue's appeal against order-in-appeal dated 05/08/05 of the Commissioner (Appeals), while on this issue, the judgment of the Larger Bench of the Tribunal in the case of Excel Rubber Ltd. vs. CCE, Hyderabad (supra ) is in favour of the Department, Hon'ble Karnataka High Court in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE, LTU, Bangalore (supra) has taken a contrary view on the same issue holding that while finalizing a provisional assessment, the excess payment of duty can be adjusted against the short payment. This judgment is with regard to the provisions of Rule 7 of the Central Excise Rules, 2002. In our view the judgment of Hon'ble Karnataka High Court is binding on the Tribunal. In view of this, there is no illegality or impropriety in Commissioner (Appeals)'s order dt 5/8/05, The Revenue's appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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