2018 (6) TMI 864 - AT - Central Excise

Adjustment of short paid duty with excess paid duty - Held that - Identical issue has came up before the Tribunal in the case of M/s. Godrej Consumer Products Ltd. vs. CCE & ST, Indore 2017 (12) TMI 1091 - CESTAT NEW DELHI , where an identical issue has been considered by the Tribunal in the case of Essar Steel India 2016 (9) TMI 1175 - CESTAT NEW DELHI , in which the Tribunal held that duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
- Appeal against Order-in-Original denying adjustment of excise duty.
- Appellant's job work for a motor vehicle manufacturer.
- Disputed period: November 2010 to December 2015.
- Appellant availed cenvat credit on duty paid materials.
- Appellant cleared finished goods on job work basis.
- Dispute over excise duty adjustment by the department.
- Tribunal's consideration of similar cases for valuation issues.
- Adjudicating authority's denial of duty adjustment.
- Application of CAS-4 for valuation and costing.
- Quantification of differential duty and adjustment of already paid duty.
- Tribunal's reliance on previous decisions for setting aside the impugned order.

Analysis:
1. The appellant, engaged in manufacturing motor vehicles for a company, filed an appeal against the Order-in-Original denying the adjustment of excise duty for the disputed period from November 2010 to December 2015. The appellant, a job worker for the company, availed cenvat credit on duty paid materials and cleared finished goods manufactured on a job work basis, leading to a dispute with the department over duty adjustment.

2. The Tribunal considered the issue of valuation and costing based on CAS-4 in similar cases, citing the case of M/s. Godrej Consumer Products Ltd. vs. CCE & ST, Indore. The Tribunal noted that the appellant paid duty on a month-to-month basis, leading to short payment in some months and excess payment in others due to annual valuation. The adjudicating authority denied the adjustment of excess paid duty, which the Tribunal found untenable based on previous decisions.

3. The Tribunal emphasized the importance of annual costing under CAS-4 for valuation, rejecting the appellant's argument that costing should be at the time of removal. The Tribunal highlighted the need for provisional assessment in cases where exact transaction value could not be determined at the time of clearance, emphasizing the correct method of determining cost based on actual audited data.

4. Regarding the quantification of differential duty, the Tribunal ruled that duty liability should be determined on an annual basis for inter-unit transfers, considering duty already paid during the year on such goods. The Tribunal set aside the impugned order, following previous decisions like Jindal Steel & Power, and allowed the appeal filed by the appellant-assessees, emphasizing the need for adjusting duty paid based on annual costing.

5. In conclusion, the Tribunal's decision to set aside the impugned order and allow the appeal was based on the correct application of CAS-4 for valuation and costing, emphasizing the importance of considering duty already paid during the relevant year for determining overall duty liability.