2023 (10) TMI 161 - AT - Central Excise

Rejection of request of provisional assessment - it is submitted that the Adjudicating Authority has passed the impugned order without verifying the records - violation of principles of natural justice - HELD THAT - It is found that initially the request for provisional assessment made by the respondent was rejected. In consequent to that impugned show cause notice has been issued to the respondent for demand of differential duty arising on account of discounts offered to their buyers. Although, the request of provisional assessment has been admitted by this Tribunal but no proceedings were initiated against the respondent for provisional assessment. Further, in this case a show cause notice has been issued to the respondent which has been adjudicated by the Adjudicating Authority after verifying all the records as the Adjudicating Authority has confirmed part of the demand against the respondent and where they found the respondent is eligible and the respondent has rightly passed on the discounts to the buyers and thus, demand was dropped. There are no infirmity in the impugned order and we also take the note of the fact that the revenue have misunderstood the proceedings initiated against the respondent. In fact, the impugned show cause notice has been issued after rejecting the request of provisional assessment by the respondent. In that circumstances, the defence taken by the Revenue that the Adjudicating Authority has to first adjudicate the provisional assessment and thereafter do the finalization of provisional assessment is misconceived. The appeal filed by the Revenue is dismissed.

Summary

Issues involved: Appeal against the impugned order dropping part of the demand, provisional assessment rejection, demand of differential duty, passing on discounts to buyers, misunderstanding of proceedings by Revenue.

Provisional Assessment Rejection:
The respondent, a tyre manufacturer, filed an application for provisional assessment which was rejected by the Adjudicating Authority. The Commissioner (Appeals) later allowed the request, setting aside the rejection order. The Revenue appealed to the Tribunal, which dismissed the appeal. The Adjudicating Authority then confirmed part of the demand where discounts were not passed on to customers, dropping the demand against the respondent. The Revenue challenged this order.

Misunderstanding of Proceedings:
The Revenue argued that the Adjudicating Authority should have finalized provisional assessment before deciding the show cause notice, and that the order was passed without verifying records. However, the Tribunal found that although provisional assessment was allowed, no proceedings were initiated. The Adjudicating Authority confirmed part of the demand after verifying records, noting that the respondent had passed on discounts to buyers. The Tribunal dismissed the Revenue's appeal, stating that the Revenue misunderstood the proceedings, as the show cause notice was issued after rejecting the request for provisional assessment. The argument that provisional assessment should have been finalized first was deemed misconceived.

Conclusion:
The Tribunal found no merit in the Revenue's arguments and affirmed the impugned order, dismissing the appeal.