2019 (3) TMI 1499 - AT - Central Excise

Valuation - allowability of deductions - whether the appellant is entitled to deductions on account of freight charge, interest on receivable and bank charges during the relevant period from April, 1997 to January, 1999? - Held that - In principle, there is no dispute of the fact that all these elements of expenses are eligible as deduction from the price in arriving at the assessable value and their admissibility to the appellant during the said period. The adjudicating authority in the order observed that the appellant had failed to produce relevant records in support of quantification of deductions claimed by them to arrive at assessable value - For the purpose of quantification, the matter needs to be remanded to the adjudicating authority. Applicability of interest on differential duty - Provisional assessment - Held that - This issue is settled by the Hon ble Jharkhand High Court in the case of Pre-Stressed Udyog (India) Pvt. Ltd. 2015 (7) TMI 1078 - JHARKHAND HIGH COURT , where it was held that Respondent is bound to make payment of interest under Rule 7 (4) even if the earlier assessment is provisional in nature - Besides, during the relevant period there was no provisional assessment resorted to by the appellant by following the prescribed procedure - the claim of the appellant that since the assessment was provisional, therefore, interest is not applicable, is not correct, hence not acceptable. The appeal is remanded to the adjudicating authority for the purpose of quantification of differential duty and interest - appeal allowed by way of remand.

Summary

Issues:
- Entitlement to deductions on freight charges, interest on receivable, and bank charges during the relevant period from April 1997 to January 1999.
- Applicability of interest on differential duty after redetermination of the assessable value.

Analysis:

Entitlement to Deductions:
The appeal concerned the entitlement of the appellant to deductions on freight charges, interest on receivable, and bank charges during the period from April 1997 to January 1999. The appellant claimed these deductions to arrive at the assessable value for duty calculation. The appellant contended that the deductions were permissible under established legal principles, supported by details and a Chartered Accountant certificate. However, the authorities disallowed these deductions initially, leading to a demand for differential duty with interest and penalty. The appellant's advocate argued that the deductions were legitimate based on precedents set by various courts. The Tribunal acknowledged the admissibility of these deductions but noted that the appellant had failed to provide sufficient records for quantification. Consequently, the matter was remanded to the adjudicating authority for proper quantification.

Applicability of Interest on Differential Duty:
Regarding the applicability of interest on the differential duty after the reassessment of the assessable value, the Tribunal referred to the judgment of the Hon'ble Jharkhand High Court in a specific case. The Tribunal highlighted that during the relevant period, the appellant did not opt for provisional assessment following the prescribed procedure. Therefore, the claim that interest should not apply due to the provisional nature of the assessment was deemed incorrect and rejected. The Tribunal emphasized that interest on the differential duty was indeed applicable in this scenario. Consequently, the impugned order was set aside, and the appeal was remanded to the adjudicating authority for the quantification of the outstanding duty and interest, allowing the appeal by way of remand.

In conclusion, the Tribunal's decision focused on the entitlement to deductions on specific charges and the applicability of interest on the recalculated duty amount. The judgment emphasized the importance of providing adequate documentation for deductions and clarified the stance on interest payment in cases of reassessed assessable values during the relevant period.