2024 (3) TMI 556 - AT - Central Excise

Price escalation clause - alteration through supplementary invoices - Propriety of resort to provisional assessment under rule 7 of Central Excise Rules, 2002 against the wishes of the assessee - HELD THAT - It is on record that finalization was, indeed, deferred amid requests made to assessee for submission of pertinent documents which was not forthcoming. No justification has been offered for truncation of the value except that payment had not been received. That, however, is of no consequence to valuation for levy of duties of central excise. Even after elapse of over a decade, the dispute over the consideration does not appear to have attained finality. The appellant, doubtlessly, is holding fast to the stand that the revised value is the actual value. Assuming of a contrary stand to question the finalization of provisional assessment is not acceptable. Therefore, the claim of transaction value having been overlooked to insinuate provisional assessment that would have the outcome of charging duty on enhanced consideration, which included elements that did not form part of the price, does not appear to be tenable. There are no reason to interfere with the rejection of the appeal of M/s Crompton Greaves Ltd by the first appellate authority - appeal dismissed.

Issues involved: Recovery under section 11A of Central Excise Act, 1944 along with applicable interest, propriety of resort to 'provisional assessment' against the wishes of the assessee, legality of finalization under rule 7 of Central Excise Rules, 2002.

Summary:
1. The limited issue in the appeal challenges the recovery directed by the original authority. The appellant, a manufacturer of transformers subject to price escalation, contests the resort to 'provisional assessment' against their wishes and the finalization thereof. The legality of such actions under rule 7 of Central Excise Rules, 2002 is questioned.

2. The appellant contends that only a few transformers faced billing problems due to price variation, leading to a dispute with central excise authorities. They argue that the resort to 'provisional assessment' was unnecessary and that the authorities imposed an unrealistic 'transaction value' without proper justification.

3. The Authorized Representative argues that the appellant failed to provide evidence to support their claimed 'transaction value'. Reference is made to legal precedents to support the position that interest liability cannot be diluted even if penalty circumstances exist.

4. The Tribunal finds that the appellant requested 'provisional assessment' and no evidence suggests coercion by authorities. The finalization of assessment was deferred pending submission of relevant documents, which were not provided by the appellant.

5. The charge of incorrect finalization is based on an ongoing legal dispute over the price of goods. The Tribunal notes that the 'transaction value' may not be adjusted based on court proceedings outcomes, and the lack of payment receipt does not affect duty levy valuation.

6. The dispute over consideration remains unresolved, with the appellant insisting on the revised value. The Tribunal rejects claims that 'provisional assessment' overlooked 'transaction value' elements, leading to charging duty on an enhanced consideration.

7. In conclusion, the Tribunal upholds the rejection of the appeal by the first appellate authority, dismissing the appeal of M/s Crompton Greaves Ltd.

(Order pronounced in the open court on 12 / 03 / 2024)

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