2017 (12) TMI 1374 - AT - Central Excise

Refund claim - Valuation - finalization of provisional assessment - Held that - Today, when the matter came up for hearing, on behalf of the appellant, Ld. Advocate Shri M. Karthikeyan submitted that the said order passed by Tribunal granting refund to M/s.Grasim Industries is sub-judice before the Hon ble Apex Court in the appeal filed by the department - the matter requires to be remanded to the Commissioner (Appeals) to await the judgement of the Hon ble Apex Court in the matter of appeal filed by department against the Tribunal s order cited supra and then to decide the issue thereupon on merits - appeal allowed by way of remand.

Issues:
1. Finalization of provisional assessment for goods supplied under a contract.
2. Inclusion of Electro Static Precipitators (ESP) in the assessment.
3. Impact of refund granted to the purchaser on the final assessment.
4. Appeal against the decision of the Commissioner (Appeals) regarding the inclusion of ESP in the assessable value.

Issue 1: Finalization of Provisional Assessment
The case involved the finalization of provisional assessments for goods supplied under a contract for setting up a power plant. The Tribunal held that the provisional assessment should be finalized without excluding any part of the goods subject to provisional assessment. It emphasized that any refund claimed by the buyer does not justify excluding goods from the final assessment. The Tribunal clarified that while a claim for refund may arise from finalizing a provisional assessment, the assessment itself should not depend on any refund. The Tribunal highlighted the importance of following the procedure laid down by the Commissioner for finalizing such assessments, ensuring all aspects, including classification, are taken care of.

Issue 2: Inclusion of Electro Static Precipitators (ESP)
The dispute arose over the inclusion of Electro Static Precipitators (ESP) in the assessment. The assessing officer initially excluded the value and weight of ESP from the final assessment, but the Tribunal directed that the provisional assessment should be finalized without excluding the value and weight of ESP. The Tribunal reasoned that the contract should be considered as a whole, and any refund granted to the purchaser should not impact the final assessment. The Original Authority, following the Tribunal's direction, included the value of ESP in the assessment.

Issue 3: Impact of Refund on Final Assessment
The department contended that while quantifying the differential duty, the refund granted to the purchaser should be deducted from the final assessment. However, the Tribunal emphasized that any refund granted to the purchaser should not affect the finalization of the provisional assessment. The Commissioner (Appeals) allowed the department's appeal, holding that the cost of ESP should not be included in the assessable value. The matter was further complicated by the fact that the order granting refund to the purchaser was under appeal before the Apex Court.

Issue 4: Appeal Against Commissioner (Appeals) Decision
During the hearing, the appellant informed the Tribunal that the order granting refund to the purchaser was sub-judice before the Apex Court. Considering this, the Tribunal decided to remand the matter back to the Commissioner (Appeals) to await the Apex Court's judgment on the appeal filed by the department. The Tribunal directed the Commissioner (Appeals) to decide the issue based on the Apex Court's decision, following the principles of natural justice. The appeal was allowed by remand.

This detailed analysis of the judgment highlights the complexities surrounding the finalization of provisional assessments, the inclusion of specific goods in the assessment, the impact of refunds on assessments, and the procedural aspects of handling appeals and remands in such cases.

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