2018 (5) TMI 1347 - AT - Central Excise

Finalization of provisional assessment - no order has been passed allowing the appellant to opt for provisional assessment, in that circumstances provisional assessment cannot be finalised - Held that - Appellant also executed bond and bank guarantee for provisional assessment and applied for finalisation of provisional assessment as appellant has acted with due diligence in opting for provisional assessment, merely a formal order for allowing provisional assessment has not been passed, cannot be a reason to hold that appellant was not allowed to clear goods on the basis of provisional assessment. Also, there was no demand notice was issued to the appellant to demand duty. In that circumstance, Commissioner (Appeals) fell in error in confirming the demand against the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Provisional assessment application not acted upon by department leading to excess duty payment and refund claim; Validity of finalization of provisional assessment without formal order; Applicability of discounts provided to buyers on assessable value determination; Challenge to Commissioner (Appeals) decision based on Metal Forgings case; Absence of demand notice; Entitlement to deductions for discounts given to buyers; Sustainability of impugned order due to lack of show cause notice issuance.

Analysis:
The appellant engaged in manufacturing Rubber V Belts and Hose Pipes faced issues regarding the correct assessable value due to discounts provided to buyers. The appellant sought provisional assessment for the Financial Year 2005-06, but the department took no action on the application, leading the appellant to clear goods provisionally and execute bonds. Subsequently, the appellant applied for final assessment to claim excess duty refund. The revenue challenged the finalization of provisional assessment due to the absence of a formal order allowing provisional assessment, which led to the impugned order being set aside by the Commissioner (Appeals).

The appellant argued that despite no formal order for provisional assessment, they acted diligently by applying for it, clearing goods provisionally, and executing necessary bonds. The appellant cited legal precedents to support their contention that they should be allowed to clear goods provisionally. The appellant also claimed entitlement to deductions for discounts provided to buyers, emphasizing the dismissal of the Revenue's appeal against a similar case.

The Tribunal observed that the appellant had applied for provisional assessment, cleared goods provisionally, and informed the department through regular returns. The Commissioner (Appeals) erred in confirming the demand against the appellant without a formal order for provisional assessment. Additionally, no demand notice was issued to the appellant. The Tribunal noted the appellant's right to deductions for discounts given to buyers, especially in light of legal decisions and the dismissal of the Revenue's appeal.

Consequently, the impugned order was set aside, and the appeal was allowed based on the appellant's diligent actions, entitlement to deductions, and procedural irregularities in the assessment process. The Tribunal found the impugned order unsustainable due to the absence of a show cause notice, ultimately ruling in favor of the appellant.