2019 (4) TMI 721 - AT - Central Excise

Finalization of provisional assessment - adjustment of short / excess payment of duty - Rule 7 of the Central Excise Rules, 2002 - Section 11B of the erstwhile Central Excise Act, 1944 - Held that - The Commissioner (Appeals) was directed to re-consider the decision of the Larger Bench in respect of abatement of cash discount in the case of CCE, Ahmedabad vs Arvind Mills Ltd., 2006 (11) TMI 4 - APPELLATE TRIBUNAL, MUMBAI , as referred by the appellant and also the case of Lucas TVS Ltd. vs CCE, Chennai, 2008 (10) TMI 76 - CESTAT CHENNAI . It has further been observed that the Commissioner (Appeals) should consider the adjustment of short / excess payment of duty upon finalization of such assessment. In view of the conflict of opinion of two Larger Bench as stated above, the Division Bench had again referred the matter to the Larger Bench. The Larger Bench of the Tribunal, in the case of Gujarat Guardian Ltd. vs Commissioner of Central Excise, Surat, 2005 (5) TMI 127 - CESTAT, MUMBAI , while deciding the reference, has observed that in view of the decision of the Hon ble Supreme Court in the case of Commissioner vs SKF India Ltd., 2009 (7) TMI 6 - SUPREME COURT , there is no need for reference of constituting of five members bench. The matter is required to be re-examined by the original authority in the light of the decision of the Hon ble Supreme Court in the case of SKF - Appeal allowed by way of remand.

Issues:
1. Provisional assessment of duty and deductions in assessable value.
2. Appeal against the order of the Commissioner (Appeals) regarding discounts.
3. Consideration of abatement of cash discount in assessable value.
4. Adjustment of short/excess payment of duty.
5. Doctrine of unjust enrichment and Rule 7 of the Central Excise Rules, 2002.

Provisional Assessment of Duty and Deductions in Assessable Value:
The appellant, engaged in manufacturing Decorative Laminates, applied for provisional assessment of duty claiming various deductions in the assessable value. The Assistant Commissioner accepted the provisional assessment and allowed discounts based on normal transaction value, confirmed by a Chartered Accountant. The appellant was directed to pay short paid differential duty and advised to file a refund claim for excess duty paid separately. The Commissioner (Appeals) rejected the appeal filed by the appellant and allowed the appeal of Revenue, leading to the appellant filing appeals before the Tribunal. The Tribunal set aside the Commissioner (Appeals) orders and remanded the case for fresh orders.

Appeal Against the Order of the Commissioner (Appeals) Regarding Discounts:
The Tribunal directed the Commissioner (Appeals) to reconsider the decision of abatement of cash discount in line with previous judgments. The Tribunal observed a conflict of opinion between different Larger Bench decisions and referred the matter to the Larger Bench for clarification. The Division Bench further referred the matter to the Larger Bench, which concluded that there was no need for a five-member bench. The Tribunal set aside the impugned order and remanded the matter to the original authority for fresh adjudication.

Consideration of Abatement of Cash Discount in Assessable Value:
The Tribunal highlighted the need for the original authority to re-examine the issue in light of the decision of the Supreme Court. The matter was remanded to the original authority to decide afresh after considering all submissions and passing an order in accordance with the law. The Tribunal emphasized that its observations should not prejudice the original authority in the new adjudication proceedings.

Adjustment of Short/Excess Payment of Duty and Doctrine of Unjust Enrichment:
The Tribunal discussed the doctrine of unjust enrichment in Rule 7 of the Central Excise Rules, 2002. It emphasized the requirement for the assessee to furnish proof against passing on the duty burden to any other person and noted the need for transaction-wise or invoice-wise discharge of this burden. The Tribunal clarified the procedure for provisional assessment followed by finalization and the necessity of filing refund claims for excess payments of duty. The Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision.

This detailed analysis of the judgment covers the issues of provisional assessment, discounts, abatement of cash discount, adjustment of duty payments, and the doctrine of unjust enrichment as discussed in the legal judgment by the Appellate Tribunal CESTAT Mumbai.

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