2004 (8) TMI 554 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 173PP of Central Excise Rules for payment of duty.

Analysis:
The appellant filed appeals against the adjudication order passed by the Commissioner of Central Excise, challenging the demand for duty at the rate prevalent on the date the invoice was raised. The appellant argued that duty should be calculated based on the rate at the time of clearance of goods as per provisions of the Central Excise Rules. The Tribunal examined Rule 173PP, which allows the Collector of Central Excise to adjust duty when its quantum cannot be determined at the time of goods removal. Referring to Circular No. 33/79-CX.6, the Tribunal noted that the assessee could make debit entries based on the average weekly duty paid in previous months and adjust within a specified period. The Tribunal found that the appellants complied with this circular by making necessary debit entries. The Revenue contended that duty should be based on the invoice issuance date, but the Tribunal emphasized that the duty rate should apply at the time of goods clearance, not invoice preparation. The Revenue failed to cite any rule supporting duty calculation based on the invoice date. Consequently, the Tribunal set aside the impugned order and allowed the appeals.

This judgment primarily revolves around the correct application of Rule 173PP of the Central Excise Rules concerning duty payment. The Tribunal clarified that duty calculation should be based on the rate applicable at the time of goods clearance, not the date of invoice issuance. By examining the provisions of the Rule and a relevant circular, the Tribunal highlighted the procedure for adjusting duty when its quantum cannot be immediately determined. The Tribunal emphasized that the Collector of Central Excise had granted relaxation for duty payment in accordance with Rule 173PP. The Revenue's argument for applying duty rate based on the invoice date was rejected due to the lack of legal support for such a stance. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the demand for duty calculated at the invoice date and allowing the appeals.

In conclusion, the judgment provides a detailed analysis of the interpretation and application of Rule 173PP of the Central Excise Rules in the context of duty payment. It underscores the importance of determining duty rates at the time of goods clearance rather than invoice issuance. The Tribunal's decision to set aside the Revenue's demand for duty based on the invoice date showcases a strict adherence to the legal provisions and established procedures governing duty calculations in excise matters.