2015 (3) TMI 1000 - AT - Central Excise

Denial of refund claim - Adjustment of excess tax paid - Held that - Commissioner (Appeals) having decided these issues directed the Assistant Commissioner to re-quantify the duty demand for the period of dispute. The duty demand for the period of dispute is covered by 8 separate show cause notices by which duty amounted to ₹ 1,55,11,932/- has been demanded. In pursuance of the Commissioner (Appeals)'s order, the Assistant Commissioner vide order-in-original dated 29/3/05 confirmed the demand of only ₹ 11,58,767/- and the operative portion of the order is totally silent about any refund. However, that order does mention that after the Commissioner (Appeals)'s order dated 24/7/98, the respondent had filed a refund claim for an amount of ₹ 1,23,82,872/- and as conceded by Shri B.L Narasimhan, the learned Counsel for the respondent, this refund claim includes the amount of ₹ 86,54,690/- mentioned in the impugned order of the Commissioner (Appeals). Thus the issue of refund of ₹ 1,23,82,872/- which includes the amount of ₹ 86,54,690/-became final vide order-in-appeal dated 28/11/03. For this reason only, the Assistant Commissioner in his order dated 29/3/05 has demanded the duty of only ₹ 11,58,767/- and has not ordered the adjustment of the amount of demand against any amount becoming refundable, as the refund claim had already been rejected. In view of this factual background, the impugned order-in-appeal dated 10/11/05 permitting the adjustment of the duty demand of ₹ 11,58,767/- against the excess payment of duty of ₹ 86,54,690/- is totally wrong and as such there was no authority for the same. We, therefore, hold that the impugned order is not correct. The same is set aside and the order-in- original dated 29/3/05 passed by the Assistant Commissioner is restored and as such the Assessee's plea for adjustment of the duty demand of ₹ 11,58,767/- against the claimed excess payment of ₹ 86,54,690/- cannot be accepted. - Decided in favour of Revenue.

Summary

Issues:
1. Assessment of assessable value based on depot prices.
2. Deduction of turnover tax, depot expenses, and cash discount.
3. Adjustment of duty demand against excess payment.
4. Applicability of Rule 9B of the Central Excise Rules, 1944.

Analysis:

Assessment of assessable value based on depot prices:
The appeal involved a dispute regarding the assessable value of goods sold through different depots. The Commissioner (Appeals) held that the price at each depot should be the basis for determining the assessable value for clearances to that particular depot. This decision was challenged, leading to subsequent orders and appeals.

Deduction of turnover tax, depot expenses, and cash discount:
The Commissioner (Appeals) also decided on the eligibility for deductions, allowing turnover tax and discounts to hospitals and nursing homes but disallowing deductions for depot expenses. The appellant's plea for cash discount deductions where applicable was also addressed in the judgment.

Adjustment of duty demand against excess payment:
The main ground of appeal was the adjustment of duty demands against excess payments. The Assistant Commissioner's order confirmed a duty demand but did not address the refund claim made by the appellant. The Commissioner (Appeals) later ordered the adjustment of duty demand against the excess payment, which was contested by the Revenue.

Applicability of Rule 9B of the Central Excise Rules, 1944:
The argument centered around the applicability of Rule 9B of the Central Excise Rules, 1944 concerning provisional assessments. The Revenue contended that since assessments were not provisional, the adjustment of short payment against excess payment was not authorized. The respondent argued that assessments should be treated as provisional, citing relevant case law.

In conclusion, the Tribunal found that the adjustment of duty demand against the excess payment was not justified as the refund claim had been previously rejected and the issue had been finalized in earlier orders. The impugned order was set aside, and the original duty demand confirmed by the Assistant Commissioner was restored. The Revenue's appeal was allowed based on the lack of authority for the adjustment as per the applicable legal provisions.