2009 (4) TMI 768 - AT - Central Excise

Intermediate product - shortages against excess payment - Held that - this is a case of provisional assessment where at the time of finalization they duty short paid is required to be adjusted against duty paid in excess and it is the differential duty if any which is required to be paid. Hence in whole situation will therefore become revenue neutral - appeal allowed - decided in favor of appellant.

Summary

In this judgement by the Appellate Tribunal CESTAT MUMBAI, the appeals were filed against an Order-in-Appeal upholding the Order-in-Original confirming differential duties. The appellants are involved in manufacturing synthetic resin supplied to a sister unit for paint production. Provisional assessment was granted initially, but finalization revealed excess duty payments. The Revenue issued a notice claiming shortages cannot offset excess payments already passed on to customers. The Assistant Commissioner and Commissioner upheld the demand for differential duty payment. The Tribunal heard arguments citing previous cases, concluding that excess duty should be adjusted against short payments in provisional assessments, making the situation revenue neutral. The confirmation of demand was deemed incorrect and unjustified, with the appeal allowed and the impugned order set aside on 6-4-2009.