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TMI Blog2024 (7) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessments were resorted to. Accordingly, the assessee appears to have filed its proposals for finalisation of the provisional assessments seeking abatement of the value of bought-out items supplied directly to site. While determining the abatement so claimed by the appellant, the Adjudicating Authority appears to have noticed that the actual purchase price of the bought-out items was higher than that claimed by the assessee in their commercial invoices wherein the average rate per 'Kg' was adopted for realising the money for supply of goods. 2. It appears from the record that during adjudication, the Adjudicating Authority considered the appellant's proposals for finalisation of their assessments in respect of direct to site supplies after adopting the averaged rate per 'kg' based on the commercial invoices, towards such supply of goods. He has also mentioned the list of documents filed by the appellant to enable him to finalise the assessments; and in one of the paragraphs, he observes '.... Thus the abatement of the value of DTS items based on the assessee's commercial invoices (which adopt the averaged rate per Kg) is not injurious but revenue oriented...'. He thus relies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this context, the First Appellate Authority has recorded that in the absence of any express provisions in the Central Excise Act/Rules/Valuation Rules that the value of DTS supplied items need not to be considered for valuation, it was imperative on the part of the Adjudicating Authority to undertake a detailed verification exercise and to bring out clear findings on the CENVAT credit availment since it has got a direct implication on the valuation and on the revenue. There is also an observation, upon perusal of certain invoices that there was every possibility for deviation with regard to availment of CENVAT credit and hence, it was for the Adjudicating Authority to verify the same, which was not done. 4.4. Insofar as the second issue framed by him is concerned which is with regard to the revenue's claim that neither the actual purchase price of bought-out items supplied directly to site has been indicated by BHEL, nor the veracity of the same was verified by the Adjudicating Authority, the case of BHEL was that the verification of the actual purchase price of bought-out items was unnecessary and unwarranted since DTS goods were duty paid goods and were already assessed to v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for enabling the finalisation of the provisional assessments. Further, there is no express provision under Central Excise Act/Rules/Valuation Rules that the value of DTS supplied items need not be considered for valuation, which was imperative on the part of the Adjudicating Authority to undertake detailed verification exercise and give a clear finding in respect of the CENVAT credit availment. He would thus pray that there being absolutely no merit in the appeal of the appellant, the impugned order may kindly be upheld. 8.1. Having considered the rival contentions, we find that the only issue to be decided by us is, "Whether the First Appellate Authority is justified in setting aside the provisional assessments"? 8.2. We have considered the Common/Final order Nos.43186-43187 dated 13.11.2018 of this Bench in the appellants own case for earlier periods which was relied upon by the appellant and we find that the facts are almost identical. Facts as recorded in the above order are as under: 2. Appellants are manufacturers of boiler components and valves and valve parts etc. They supply boiler components to various power projects spread all over India on contract basis und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . So also, in respect of supplies made to Tata Power Company Ltd., Mumbai, the original authority vide finalization of provisional assessment order dt. 29.11.2011 allowed deduction of value with respect to DTS supplies from the assessable value based on values mentioned in the commercial invoices. Excess paid amount of Rs.4,92,337/- was ordered for refund, however interest under section 11BB read with Rule 7 (5) of Central Excise Rules, 2002 was held as payable to BHEL from January 2010 on the said excess amount of Rs.4,92,337/-. In appeal, in the resultant impugned Order in appeal No.173/2012 dt. 31.08.2012, the Commissioner (Appeals) allowed the appeal of department and directed the lower authority to decide the issue afresh for determination of duty and finalization of assessment after scrutiny of all related vendors invoices and corresponding commercial invoices. Hence Appeal No. E/509/2012 by BHEL. 3. When the matter came up for hearing, on behalf of the appellants, Ld. counsel Shri Raghavan Ramabhadran made oral and written submissions which can be broadly summarised as under : (i) For both shop made and DTS supplies, the appellant issues commercial invoices to the custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimated design weight which method is approved by the customer. This Rate/Kg. is applied for payment of central excise duty at the time of clearance of each consignment of Boilers and also for the collection of the contract value progressively from the customer. (vi) Hence it is submitted that submission of actual cost of production, escalation if any and other eligible expenditure or overheads is not required since it is a well-established fact that the contract price, being the agree price between BHEL and its customers, is the transaction value. (vii) As per the provisions of Rule 7 of CER, 2004, the Assistant Commissioner is required to finalise the assessment by adjusting the amount of duty provisionally paid against the amount of duty finally payable by the assessee on finalization. Thus, Rule 7 mandates that wherever duty has been paid in excess, the same should be adjusted against duty short paid to determine the final amount payable, if any. The entire purpose of provisional assessment will be defeated if the same is not allowed. (viii) Reliance is placed on the decision of the Hon'ble High Court of Karnataka in Toyota Kirloskar Auto Parts Pvt. Ltd. Vs CCE LTU Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what are the ingredients of cost added to invoice value of the bought out items which resulted in overvaluation. Possibly, objection to the "high" price of DTS items is on account of the apprehension that vis-à-vis the total contract cost, the cost of excisable goods manufactured by the appellants would then get depressed resulting in lower than required discharge of central excise duty. However, such a suspicion has to be sufficiently proved by the Revenue with incontrovertible evidences, nothing of that sort has been done. Though "high invoicing" of DTS goods has been wrongly flagged by the department, there has been no attempt to show that the value adopted for discharge of excise duty on goods manufactured by appellants are "not actual transaction values". 7.3 In any case, the defects and difficulties in the very same practice for finalizing provisional assessment was addressed in detail in the aforesaid Office Order dt. 22.12.2004 and in particular, it was noted that "the basis for arriving at the value of items supplied to other units of BHEL and items supplied directly to site cannot be easily verified "at the time of finalization" The said Office Order also conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Office Memorandum and, secondly, there is no question raised as to the Adjudicating Authority not following the directions/guidelines in the office memorandum. If there is something which the revenue now feels that the original authority should have done, is typically re-assessing by adopting another opinion, which is not permissible. The view expressed after following the Office Memo cannot be replaced by any other view/s later on, under the guise of the original authority's alleged failure, which would only amount to 'change of opinion' at the most. There should have been something more brought out on record as to the assessee or the Adjudicating Authority violating the terms of the Office Memorandum, which is not the case here and hence, it is just a surmise without any basis. This is precisely why the Jurisdictional Commissioner has considered and very elaborately discussed the implications including 'injury' to the interest of the revenue and after being satisfied, has thought it fit to issue the Office Memorandum dated 22.12.2004. 10.3. It was also contended that the terms of the office memorandum were that the assessee should furnish all details/documents, which have no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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