2014 (2) TMI 691 - AT - Central Excise

Finalization of provisional adjustment - adjustment of excess payment with short payment - Held that - any excess payments made can be adjusted towards short-payments at the time of finalizing of the provisional assessments. The finalization of the assessments has been done vide Order-in-Original No. 14/1995, dated 24-6-1995. Therefore, the adjudicating authority has correctly adjusted the excess payments made by the assessee towards the short-payments which were due from them - This provision has been incorporated in the statute vide Notification No. 45/99-C.E., dated 25-6-1999. Therefore, prior to 25-6-1999 the adjudicating authority could adjust the excess payments made at the time of provisional assessment towards short-payments arising at the time of final assessment - Decided against Revenue.

Summary

Issues: Appeal against Order-in-Appeal disallowing deductions for excisable value calculation and adjusting excess payments against short-payments without following Section 11B procedure.

Analysis:
1. Deductions Disallowed: The respondent, a manufacturer, claimed various deductions for excisable value calculation. The assessing authority disallowed deductions for secondary packing, volume discount, cash discount, and handling charges but allowed deductions for year-end discount. The final assessment directed the respondent to make a balance payment after adjusting excess payments. The Revenue contended that the excess payments should not have been adjusted against short-payments without following the procedure under Section 11B of the Central Excise Act, 1944.

2. Provision for Adjustment: The Revenue argued that the excess payments should have been handled as per Section 11B and not adjusted against short-payments. The learned Additional Commissioner highlighted Rule 9B of the Central Excise Rules during the relevant period, allowing for such adjustments. The respondent's counsel supported the lower authorities' orders, stating that Rule 9B permitted adjusting excess payments against short-payments at the time of finalizing provisional assessments in 1995.

3. Rule Interpretation: The Tribunal analyzed Rule 9B, noting that during the finalization of provisional assessments in 1995, excess payments could be adjusted against short-payments. The Tribunal referenced the subsequent amendment in 1999, requiring refunds to follow Section 11B procedure. As the adjustments were made before the amendment, the Tribunal found no merit in the Revenue's appeal, dismissing it as lacking substance.

4. Conclusion: The Tribunal upheld the lower authorities' decision, stating that prior to the 1999 amendment, adjusting excess payments against short-payments during final assessments was permissible under Rule 9B. Consequently, the Revenue's appeal was dismissed, and the cross-objection was disposed of, affirming the adjustment made by the adjudicating authority as lawful and in line with the applicable rules.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, the interpretation of relevant rules, and the final decision reached by the Tribunal.