2008 (11) TMI 548 - AT - Central Excise

Summary

Issues: Finalization of provisional assessment, differential duty calculation, interest and penalty determination

Finalization of Provisional Assessment:
The appellant received inputs from M/s Tata Iron and Steel Company Ltd. (M/s TISCO) cleared on provisional price, which were further processed and returned to M/s TISCO. The appellant argued that since the inputs were cleared on provisional price, the finished goods should also be deemed provisionally assessed, even though no specific request was made for provisional assessment. The appellant recalculated the differential duty amount, showing a detailed chart to the adjudicating Commissioner, which was not considered. The Tribunal found evidence on the invoices that the inputs were indeed cleared on provisional price, and after availing Modvat credit, the inputs were defaced. Therefore, the Tribunal accepted the appellant's plea, setting aside the impugned order and remanding the matter for finalization of provisional assessment based on all relevant facts.

Differential Duty Calculation:
The appellant re-calculated the differential duty amount, considering the duty paid on the provisionally determined price and the duty payable on the final price. The recalculated amount was Rs. 32.12 lakhs against the total demand of Rs. 51.55 lakhs. The Tribunal agreed with the appellant's calculation methodology and directed the original authority to consider the calculation chart submitted by the appellant for correct quantification of the differential duty, which should be adjusted against the payment already made.

Interest and Penalty Determination:
The Department argued that the appellant did not specifically request provisional assessment or re-calculation of duty, and the payment of differential duty was made only after a show-cause notice was issued. The Department supported the impugned order confirming duty and penalty of equal amount. However, the Tribunal found in favor of the appellant, setting aside the demand for interest and penalty for redetermination in accordance with the law.

In conclusion, the Tribunal allowed the appeal, remanding the matter for finalization of provisional assessment, correct quantification of the differential duty, and redetermination of interest and penalty, based on the evidence presented and the legal principles governing provisional assessment.