2017 (12) TMI 1432 - AT - Central Excise

Finalisation of provisional assessment - adjustment of excess paid duty with short paid duty - Held that - the adjustment of excess payment of duty against short payment thereof during the provisional assessment period has been ordered before determining the ultimate demand or refund, in the light of the Hon ble High Court of Karnataka decision in the case of Toyota Kirloskar Auto Parts Ltd. 2011 (10) TMI 201 - KARNATAKA HIGH COURT - the impugned order set aside and matter remanded back to the original authority to pass de novo order - appeal allowed by way of remand.

Summary

Issues:
Dispute regarding finalization of provisional assessment for the year 2001-02 - Adjustment of excess paid duty against short paid duty - Entitlement to refund for excess duty paid - Application of legal precedents - Decision on appeal for remand.

Analysis:

1. The appeal was filed against the Order-in-Appeal concerning the finalization of provisional assessment for the year 2001-02, involving M/s. Brakes India Ltd., Nanjangud. The appellant paid duty based on the cost of goods determined by CAS-4 certificates for clearance to sister concerns. The original authority found a shortfall of &8377; 4,44,865 and an excess payment of &8377; 29,45,016 during different periods. Both authorities held that the excess payment could not be adjusted against the shortfall as it had been passed on to the sister concern, and the refund claimed was credited to the Consumer Welfare Fund, leading to the appeal.

2. The appellant argued for adjusting the excess duty against the short paid duty during finalization of provisional assessment, citing the Karnataka High Court's decision in a similar case and previous Tribunal decisions in their favor. The Department opposed, referring to a Supreme Court decision stating that only the ultimate bearer of duty could claim a refund, and since the duty burden was transferred to the sister concern, the appellant was not entitled to adjust the excess duty.

3. The Tribunal noted a similar issue in another unit of the appellant, where adjustment was allowed based on the Karnataka High Court's decision. Following this precedent, the Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision, directing to adjust the excess duty against the short payment before determining any refund or demand, in line with legal guidelines and precedents.

4. Consequently, the appeal was allowed by remand, emphasizing the need for adjusting excess duty against short payment during the provisional assessment period, as per legal interpretations and precedents, ensuring a fair and reasoned decision by the original authority in compliance with established legal principles.

(Order dictated in Open Court on 04/12/2017)