2011 (7) TMI 1099 - CGOVT - Central Excise

Summary

Issues involved:
The case involves the finalization of provisional assessment for the clearance of raw Naphtha by a central excise unit, calculation of duty on gain and loss, and the dispute regarding the duty demand based on monthly versus total period assessment.

Finalization of Provisional Assessment:
The central excise unit, engaged in the manufacture of petroleum products, was granted permission for clearance of raw Naphtha on a provisional basis without payment of duty. The duty payable on the loss occurred during the provisional assessment period was calculated and paid by the applicant. However, discrepancies were found in the data furnished for finalization of the provisional assessment, leading to a show cause notice for demanding differential duty on the entire quantity of loss of raw Naphtha. The case was adjudicated by the respondent based on the data provided.

Appeal and Revision Application:
The applicant filed an appeal before the Commissioner (Appeals) challenging the demand for duty on loss and seeking a refund for the estimated loss during the provisional assessment period. The Commissioner (Appeals) remanded the case back to the original authority for recalculation of duty on a monthly basis, which the applicant contested as illegal under Section 35F of the Central Excise Act. The applicant argued that duty on the loss should have been calculated by considering the clearances of the full provisional assessment period together.

Government's Decision:
After considering the case records and submissions, the Government observed that the provisional assessment was finalized demanding duty on the entire quantity of raw Naphtha lost during the period. The Commissioner (Appeals) directed the original authority to work out the loss and duty demand on a monthly basis, which was upheld by the Government. The Government noted that the monthly returns filed by the assessee required assessment on a monthly basis, and the gain and loss should be settled for each month as per the returns. The Government found no legal basis for the applicant's argument to compute gain and loss for the entire 6-month period and upheld the orders-in-appeal.

Conclusion:
The revision applications were rejected by the Government for being devoid of merit, and the impugned orders-in-appeal were upheld.