2023 (9) TMI 355 - AT - Central Excise

Less recovery of duties of central excise on clearances - Entitlement of concessional rate of duty - HELD THAT - It is seen from the grounds of appeal that the statutory requirement of monthly removals mandated by the Maharashtra State Pollution Control Board (MSPCB) precluded any other option and any detriment arising from computation of entitlement to monthly computation of entitlement for domestic clearance would be inequitable. That certain classes of units are entitled to such periodicity of clearance rules out rigidity of approach in computing entitlements. There is no reason to deny such computation to the appellant herein. Demand relating to domestic clearance at full rate of duty - HELD THAT - On the dispute limited to ₹. 7,82,337, it would appear that the justification offered by appellant for the appropriate value of clearances has not been appreciated by the lower authorities - there is a casual dismissal of the submission. The veracity of the entitlement for clearance at concessional rate of duty, as submitted by the appellant, needs to be carried out and the submissions of the appellant on the value of the clearances effected at full rate of duty need consideration. These are to be undertaken by the original authority. Impugned order set aside - matter on remand.

Summary

Issues involved:
The dispute involves less recovery of central excise duties on clearances, entitlement for concessional rate of duty, discrepancy in value declarations, and justification for monthly computation of entitlement for domestic clearance.

Central Excise Duty Clearance Dispute:
The appellant, a manufacturing unit approved for conversion into a hundred per cent export oriented unit, faced demands of Rs. 36,18,965 and Rs. 7,82,337 under the Central Excise Act, 1994, for clearances in 2010-11. The dispute centered around short levy on clearances and entitlement for concessional rate of duty. The appellant had been clearing processed fly ash into the domestic market at concessional and full duty rates, leading to discrepancies in reported values and jurisdictional filings.

Entitlement for Concessional Rate of Duty:
The appellant's entitlement for concessional rate of duty was under scrutiny, with demands arising from excess clearances in the domestic tariff area beyond prescribed limits. The lower authorities held a remaining unreconciled amount of Rs. 4,61,766, which the appellant disputed. The appellant's justification for excess clearances and application of low duty rates was examined, with the authorities finding fault in the appellant's calculation.

Discrepancy in Value Declarations:
A demand of Rs. 7,82,337 stemmed from misdeclaration of domestic clearances in Excise Returns-2 compared to declarations in the Annual Performance Report submitted to the Development Commissioner for 2010-11. The appellant's argument that differences in values were expected between the two declarations was dismissed, with the authorities asserting that the discrepancies indicated an intention to evade duty payment.

Monthly Computation of Entitlement Dispute:
The appellant contended that monthly removals mandated by the Maharashtra State Pollution Control Board necessitated monthly computation of entitlement for domestic clearance, which was not accepted by the authorities. The appellant argued for flexibility in computing entitlements based on periodicity rules set by regulatory bodies.

Judgment Outcome:
After hearing arguments, the impugned order was set aside, and the matter was remanded to the original authority for a reevaluation of the appellant's entitlement for concessional rate of duty and the discrepancies in value declarations. The need for a thorough examination of the appellant's submissions and justifications was emphasized for a fair resolution of the disputes.