2018 (5) TMI 542 - AT - Central Excise

Finalization of provisional assessment - adjustment of excess paid duty with short paid duty - Held that - the appeal is devoid of merits as first appellate authority in the impugned order has correctly come to the conclusion, by addressing the issue from the provisions of Rule 7 of the Central Excise Rules 2002 - It can be seen that the law as settled is correctly followed by the first appellate authority. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Adjustment of excess payment against short payment in provisional assessment under Rule 7 of Central Excise Rules, 2002.

Analysis:
1. The appeal challenged an Order-in-Appeal regarding the finalization of provisional assessment for the manufacture of High Carbon Ferro Chrome (HCFC) by the respondent. The respondent opted for provisional assessment due to the unknown cost of production at the time of clearance. The Adjudicating Authority finalized the assessment for 2008-2009, demanding differential duty without allowing the adjustment of excess duty paid against short payment. The appellate authority, however, accepted the respondent's contention for adjustment, leading to the appeal by the revenue.

2. The Departmental Representative argued that Rule 7 of the Central Excise Rules, 2002, mandates month-wise finalization of assessment and demands short payments with interest. He contended that allowing adjustment for almost a year would result in indirectly refunding excess duty without considering unjust enrichment. The representative believed the matter should not have been remitted to lower authorities.

3. The Respondent's Counsel cited precedents from the Hon'ble High Court of Karnataka and Tribunal cases supporting the adjustment of excess payment against short payment. The first appellate authority's decision was based on the interpretation of Rule 7, which was consistent with legal precedents. The law as established in the cited cases favored the respondent's position on the adjustment issue.

4. The Tribunal, after careful consideration, found the facts undisputed and the appeal lacking in merit. The appellate authority correctly interpreted Rule 7 in allowing the adjustment of excess payment against short payment in the finalization of provisional assessment. Citing the relevant provisions of Rule 7 and legal precedents, the Tribunal upheld the appellate authority's decision as legally sound and in line with established law. The appeal was rejected, affirming the correctness of the impugned order.

In conclusion, the judgment addressed the issue of adjusting excess payment against short payment in provisional assessments under Rule 7 of the Central Excise Rules, 2002. The Tribunal upheld the appellate authority's decision, supported by legal precedents, and rejected the appeal by the revenue, affirming the legality of the impugned order.