2016 (11) TMI 14 - AT - Central Excise

Adjustment of excess payment of duty with the short payment of duty - Price Variation Clause - manufacture of communication equipment - freight charges - Packing and Forwarding charges - freight charged at the rate of 1% through commercial invoices in additional to the amounts of freight charged and claimed in the respective invoices (for which abatement already stands granted) - Held that - the decision in the case of Hindustan Zinc Ltd. vs. Commissioner of Central Excise, Jaipur 2015 (11) TMI 953 - CESTAT NEW DELHI (LB) followed where it was held that the assesse is entitled for adjustment of excess paid duty with the short-paid duty during the period of provisional assessments, upon finalization of the assessments - Revenue s view not justified - appeal dismissed - decided against Revenue.

Summary

Issues:
- Whether excess duty paid can be adjusted against duty short-paid during finalization of provisional assessments under Rule 9B of Central Excise Rules.
- Whether the decision in a previous case involving the same party should be followed in the present case.

Analysis:

Issue 1: Excess duty paid adjustment
The appeals dealt with the finalization of provisional assessments involving charges for freight and packing by the manufacturer. The Revenue contended that the excess freight and packing charges should be added to the assessable value for demanding differential Central Excise duty. The appellant adjusted excess duty paid during provisional assessments against short-paid duty, which the Revenue rejected. The Revenue argued that duty short-paid must be paid separately, and excess duty paid should go through the refund process under Section 11B of the Central Excise Act, 1944. The Commissioner (A) allowed the adjustment, leading to Revenue's appeal.

Analysis Continued:

The Revenue maintained that the Larger Bench of CESTAT in Excel Rubber Ltd. v. CCE held that adjustments should be based on unjust enrichment principles, with the burden of proof on the assessee. The Hon'ble High Court of Karnataka allowed adjustments in Toyota Kirloskar Auto Parts Pvt. Ltd. v. CCE but based on different circumstances. The appellant cited Hindustan Zinc Ltd. v. CCE, where adjustments were allowed without unjust enrichment tests. The Bangalore Bench of CESTAT also allowed adjustments in a similar case. The Tribunal, considering previous decisions, ruled in favor of the assessee, allowing the adjustment of excess duty paid against short-paid duty during finalization of provisional assessments.

Issue 2: Precedent Followed
The Tribunal found that a previous decision involving the same party for a different period supported the allowance of adjustments between excess duty paid and short-paid duty during finalization of provisional assessments. Citing the previous ruling, the Tribunal rejected the Revenue's appeals, stating that the facts and issues were identical. The decision was based on following the earlier order of the Tribunal, leading to the rejection of the Revenue's appeals.