2018 (3) TMI 602 - AT - Central Excise

Finalisation of provisional assessment - demand of differential duty - computer processing charges - consultancy and professional charges - power (factory and diesel (factory). Held that - While the orders of the lower authorities have gone into each of the disputed areas, however, these grievances of the appellants, which are seen to have been raised even before the adjudicating authority do not appear to have given cognizance or otherwise analyzed and rejected with reasoning - the interest of justice would be served by remanding the matter to the original authority for denovo consideration in respect of these three cost areas disputed by the appellant - appeal allowed by way of remand.

Summary

Issues involved:
1. Finalization of provisional assessment for differential duty liability.
2. Disputed areas of computer processing charges, consultancy and professional charges, power (factory), and diesel (factory).

Detailed Analysis:
1. The case involves M/s. Kone Elevators India Pvt. Ltd., engaged in manufacturing elevators and escalators, facing differential duty liability for the period 1.1.2005 to 31.12.2005. The original adjudicating authority finalized provisional assessment, leading to an appeal partly allowed by the Commissioner (Appeals) but upholding certain aspects. The appellants challenged the decision before the Tribunal.

2. The appellant's counsel argued that the finalization was based on a qualified cost accountant certificate, which was not considered adequately. They contended that the allocation of expenses like computer processing charges, consultancy and professional charges, power, and diesel to production was incorrect. The appellant provided detailed arguments and evidence to support their position, highlighting errors in the department's calculations and methodology.

3. The appellant disputed the allocation of factory expenses to production activities, arguing that certain costs should not be entirely attributed to production. They also challenged the classification of consultancy and professional charges as administrative overheads, emphasizing that only costs related to production should be included. Additionally, the appellant contested the allocation of power and diesel costs to production, presenting evidence that only a portion of these costs was necessary for production activities.

4. The lower appellate authority upheld the original assessment on the disputed areas, citing the Cost Accountant's report and explanations. However, the Tribunal found merit in the appellant's contentions, noting the extensive materials provided, including the Chartered Accountant's certificate and supporting documents. The Tribunal concluded that a remand to the original adjudicating authority for a fresh consideration of the disputed cost areas was necessary, allowing the appellant to present additional evidence and ensuring a personal hearing before a new decision is made.

5. Ultimately, the appeal was allowed by way of remand to the original adjudicating authority, emphasizing the need for a thorough reassessment of the disputed cost areas in light of the appellant's contentions and evidence. The decision aimed to uphold the principles of justice and fairness in the finalization of the provisional assessment for differential duty liability.