2015 (12) TMI 1347 - AT - Central Excise

Demand of interest - whether short payment of duty should be adjusted towards the duty where the appellant had paid excess duty - whether the Tribunal was right in confirming the demand of interest under rule 7(4) of the Central Excise Rules, 2002 without harmoniously reading the provisions of rule 7(5) of the Central Excise Rules, 2002 - Held that - On perusal of the records and the judgment in the appellant s own case 2015 (12) TMI 730 - CESTAT MUMBAI as decided on 3.11.2014, we find that the issue is same and squarely covered in the appellant s favour. The reliance placed by the Tribunal in the case of Toyoto Kirloskar Auto Parts (2011 (10) TMI 201 - KARNATAKA HIGH COURT) is correct - impugned order is unsustainable and liable to be set aside - Decided in favour of assessee.

Summary

Issues involved:
- Claim of abatements for arriving at assessable value
- Provisional assessment for the period 2001-02, 2002-03, and 2003-04
- Adjustment of short payment of duty against excess duty paid
- Interpretation of Rule 7 of the Central Excise Rules

Detailed Analysis:
1. The appellant claimed various abatements like trade discount, free bonus, quantity discount, free replacement of breakages, freight, octroi, insurance, interest on receivables, and turnover tax for determining the assessable value. Seeking provisional assessment due to the uncertainty of the exact deductions until final accounts were completed, the appellant faced resistance from lower authorities who invoked Rule 9(B)(5) of the Central Excise Rules. This rule required the appellant to file a refund application for excess duty paid in provisional assessments where there was short payment of duty.

2. The appellant's counsel argued that a previous Tribunal order favored the appellant's position, citing judgments from BSNL Ltd. and the High Court of Karnataka in the case of Toyota Kirloskar Auto Parts P. Ltd. The Tribunal examined the records and the previous judgment dated 3.11.2014, finding the issue identical and favoring the appellant. The Tribunal agreed with the reliance on the judgment in the case of Toyota Kirloskar Auto Parts and reiterated the findings from the appellant's previous case.

3. The Tribunal delved into the interpretation of Rule 7 of the Central Excise Rules, particularly focusing on the provisions related to provisional assessment, payment of duty on a provisional basis, final assessment, and the liability for interest or refund. The Tribunal emphasized the importance of harmoniously reading the provisions of Rule 7(4) and Rule 7(5) to determine the correctness of interest demands and refund entitlements. Ultimately, the Tribunal found the impugned order unsustainable and set it aside, allowing the appeal with any consequential relief deemed necessary.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, legal interpretations made, and the final decision rendered by the Tribunal.