2018 (8) TMI 413 - AT - Central Excise

Provisional Assessment - want of data on cost of transportation, which is requirement of Rule 5 of the said Rules - Held that - After ordering Provisional Assessment for want of data on cost of transportation subsequently Revenue cannot change its stand and order finalization of assessment by invoking the said Rule 7 - the impugned Order-in-Appeal is not sustainable. The issue is required to go back to the Original Authority for re-calculation of duty - appeal allowed by way of remand.

Summary

Issues:
Provisional assessment based on lack of transportation cost data, applicability of Rule 5 and Rule 7 of Central Excise Valuation Rules, 2000, finalization of assessment, differential duty demand, appeal challenging assessment method, re-assessment based on Rule 7.

Analysis:
The appeal before the Appellate Tribunal CESTAT ALLAHABAD arose from an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Allahabad. The case involved the appellants engaged in manufacturing Asbestos Cement Products, subject to provisional assessment for the period from 01/04/2007 to 31/01/2008 due to lack of transportation cost data. The appellants cleared goods on duty payment from the factory and transferred goods to Depots & Consignment Agents, paying duty at the agents' premises upon clearance. The Original Authority invoked Rule 5 of the Central Excise Valuation Rules for final assessment, resulting in a demand for differential duty of ?3,11,285. Both the appellants and the Revenue challenged the assessment method, with the Revenue contending that Rule 7 should have been applied uniformly. The Commissioner (Appeals) allowed the Revenue's appeal, ordering re-assessment under Rule 7 for all transactions, leading to the appellant's appeal before the Tribunal.

The appellant argued that the provisional assessment was based on the lack of transportation cost data, not meeting the requirement of Rule 7, and urged the application of Rule 5 only for final assessment. The Revenue supported the impugned Order-in-Appeal. Upon considering the contentions and facts, the Tribunal found that the Provisional Assessment was due to the unavailability of transportation cost data, a requirement under Rule 5 for final assessment. The Tribunal held that Revenue could not change its stance post-Provisional Assessment and invoke Rule 7 for finalization. Consequently, the Tribunal deemed the Order-in-Appeal unsustainable, remanding the matter to the Original Authority for re-calculation of duty. The Tribunal directed the Authority to finalize assessment under Rule 5, determine duty payable or refundable, and if a refund was due, to promptly allow it to the appellant.

In conclusion, the Tribunal allowed the appeal by remanding the case for re-assessment under Rule 5, emphasizing the importance of adhering to the correct valuation rules and ensuring a fair determination of duty payable or refundable in accordance with the law.