2023 (12) TMI 169 - AT - Central Excise

Provisional clearances or not - Valuation - inter-unit transfer - Re-determination of liability as finalization of provisional assessment - HELD THAT - In the absence of exercise of option by the assessee for provisional assessment , it is not open to central excise authorities to deem the clearances to have been provisional and to proceed with final assessment for each year. The impugned order set aside - appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are confirmation of demand under section 11A of Central Excise Act, 1944, imposition of penalty under section 11AC of Central Excise Act, 1944, and determination of duty liability based on CAS-4 certificates for clearance of goods.

Confirmation of Demand u/s 11A and Penalty u/s 11AC:
The appeal arose from the order of Commissioner of Central Excise (Appeals), Pune, confirming a demand of Rs. 43,48,897 under section 11A of the Central Excise Act, 1944, and imposition of a penalty of a like amount under section 11AC of the same Act. This was in relation to the clearance of goods from the appellant's unit at Pimpri to their factories at Urse and Goa between April 2007 and March 2009 and April 2010 and March 2010.

Duty Liability Determination based on CAS-4 Certificates:
The appellant had been discharging duty liability under the Central Excise Act, 1944, by adopting a computation in the certificate of cost accountant, based on CAS-4, for clearances of goods that attained a 'semi-finished' form at their Pimpri factory and were cleared to other units for utilization in the manufacture of 'cables and wires'. The central excise authorities required the appellant to re-determine the cost of production on the basis of CAS-4 pertaining to the financial year, making it an annual exercise instead of a monthly determination of assessable value.

Judicial Precedent and Disposal of Identical Issue:
The appellant referred to a previous order of the Tribunal concerning a similar issue, where it was held that the assessments made on the basis of CAS-4 certificates should be treated as final. The appellant argued that there was no intention to evade payment of duty, as they had disclosed all relevant facts and had paid duty in excess on occasions. The Tribunal, following the previous decision, set aside the impugned order and allowed the appeal, emphasizing that without the exercise of an option for 'provisional assessment', the authorities could not deem the clearances as provisional and proceed with final assessment for each year.

This summary provides a detailed overview of the issues involved in the judgment, including the confirmation of demand under section 11A, imposition of penalty under section 11AC, and the determination of duty liability based on CAS-4 certificates for the clearance of goods. The judgment also highlights the importance of judicial precedent in similar cases and the appellant's argument regarding the intention to evade payment of duty.