CX - Finalisation of provisional assessments - Inter se adjustment of excess and short payment is allowed : CESTAT by majority
By TIOL News Service
NEW DELHI, NOV 16, 2015: THE Appellants cleared their products viz. lead and zinc concentrates to their sister concerns and as the actual moisture content and arms-length price of the products were not available at the time of clearance, the same were assessed provisionally. The provisional assessments were later finalised for the period from 1.4.2006 to 31.3.2007. At the time of finalisation, it was found that the Appellants had short paid duty to the extent of Rs . 8,75,83,871/-during the period 1.4.2006 to 11.1.2007 and excess paid duty to the extent of Rs.3,53,74,279 /-during the period 12.1.2007 to 31.3.2007. The Adjudicating Authority on finalisation, demanded short paid duty with interest and rejected adjustment of excess paid duty.
The appellant inter alia contended that as per the ratio of the judgment of Karnataka High Court in the case of Toyota Kirloskar Auto Parts Pvt Ltd. Vs. CCE , LTU , Bangalore - 2012-TIOL-10-HC-KAR-CX inter se adjustments of duty short paid and duty excess paid has been permitted and it has also been held that interest is not chargeable if the duty excess paid is more than the duty short paid.
Member (T) held that the assessee is not eligible to claim refund of the excess duty paid and consequently inter se adjustments of duty short paid and excess paid during the period of provisional assessment is not permitted at the time of finalisation in terms of Rule 7. However, Member (J) differed with the above view and held that the excess duty paid during the period January, 2007 to March, 2007 is required to be adjusted against the short paid duty during the period upto January, 2007 and the assessed duty liability has to be arrived at accordingly. It stands held by the High Court in Toyota Kirloskar Auto Parts Pvt. Ltd.- 2012-TIOL-10-HC-KAR-CX that interest liability would arise only in respect of short fall of duty, which has to be arrived at after taking into account the overall short and excess payments made by the assessee.
In view of the difference of opinion between the two members, the matter was placed before the Third Member. The Third Member agreed with the findings of the Member (J) and held:
+ As the facts of this case are similar to the facts in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. therefore, the decision of the Larger Bench of this Tribunal in the case of Excel Rubber Ltd. - 2011-TIOL-536-CESTAT-DEL-LB has no relevance. Consequently, I am of the considered view that "It is total duty payable of all the goods which are subject matter of provisional assessment and final assessment which is to be taken into consideration. After taking into consideration duty payable in respect of all goods and duty paid in pursuant to the final assessment order if still the assessee is due in any duty then for short fall in payment of duty the assessee is liable to pay interest."
+ Admittedly, in this case the Adjudicating Authority has held that for the part of the period in hand the appellant has short paid the duty of Rs.3,52,78,170 /-and in respect of other part of the period the appellant has paid Rs.3,53,74,279 /-duty in excess. Therefore, the duty excess paid by the appellant is more than the duty short paid by the appellant. Therefore, appellant is not required to pay any duty. Consequently, interest is not payable. In these circumstances, I agree with Ld. Sister, Member (Judicial).
Thus, by majority order, the appeal filed by the assessee was allowed.
(See 2015-TIOL-2427-CESTAT-DEL)
