2024 (6) TMI 370 - AT - Central Excise

Methodology for final assessment of provisional assessments - Best judgement assessment - finalizing the provisional assessment on Best Judgement method without considering the methodology already accepted by the Department, CA certificate and the calculation sheet duly certified by the Chartered Accountant - suppresstion of facts or not - Extended period of limitation. Methodology for final assessment of provisional assessments - HELD THAT - The appellant has initially adopted the clearance provisionally and thereafter, worked out a formula for final assessment, which has been approved. On the basis of said formula, the appellant filed a certificate issued by the Chartered Accountant duly certifying the assessable value arrived, on the basis of methodology adopted for the earlier period, and sought final assessment. The ld. adjudicating authority sought to verify all the invoices along with related documents. As the certificate issued by Chartered Accountant, verifying the details and examining the documents, has been issued, the same cannot be discarded by the ld. adjudicating authority. Without assigning any reason. Therefore, the CA certificate is an acceptable document for finalization of provisional assessment is to be done in terms of the certificate issued by Chartered Accountant for the impugned period. Extended period of limitation - Suppresstion of facts or not - HELD THAT - While remanding the matter, the Ld. Commissioner (Appeals) has made the observation that to revise the terms of finalization of provisional assessment, a Show Cause Notice is required to be issued. The said order was passed by the Ld. Commissioner (Appeals) on 21-08-2009, but the Show Cause Notice has been issued on 21-11-2011 which is beyond the normal period of limitation. As the appellant has not suppressed any fact or details from the Department, therefore the Show Cause Notice issued for the extended period of limitation is not sustainable at all. There are no merit in the impugned order and accordingly, the same is set aside - appeal allowed.

Summary

Issues Involved:
1. Methodology for final assessment of provisional assessments.
2. Validity of the Chartered Accountant (CA) certificate.
3. Issuance of Show Cause Notice (SCN) and limitation period.
4. Best Judgment Assessment by the adjudicating authority.

Summary:

1. Methodology for Final Assessment of Provisional Assessments:
The appellant, engaged in manufacturing commercial motor vehicle parts, adopted a Uniform Maximum Retail Price (UMRP) for pricing products and used provisional assessments due to varying sales tax and discount rates at different locations. The methodology, approved by the Assistant Commissioner in 2007, involved provisional assessment based on previous year figures and final assessment based on actual figures supported by a CA certificate. For the period July 2001 to May 2006, the appellant claimed an excess duty paid of Rs. 38,70,864.50/-. However, the department, rejecting the appellant's documents, demanded factory gate invoices and RWH sale invoices for all RWHs. The Assistant Commissioner, in 2008, confirmed an excise duty demand of Rs. 57,11,996/- using a different methodology.

2. Validity of the Chartered Accountant (CA) Certificate:
The appellant argued that the CA certificate, which was based on the previously approved methodology, should not be disregarded without identifying any flaws. The Tribunal agreed, citing precedents where CA certificates were upheld unless concrete discrepancies were pointed out. The Tribunal emphasized that the CA certificate, verifying the assessable value, must be accepted unless specific errors are demonstrated.

3. Issuance of Show Cause Notice (SCN) and Limitation Period:
The Commissioner (Appeals) had remanded the matter, directing that any revision in the finalization terms required a SCN. The SCN issued on 21-11-2011 was beyond the normal limitation period, and since the appellant had not suppressed any facts, the extended period for issuing the SCN was deemed unsustainable. The Tribunal set aside the impugned order on this ground alone.

4. Best Judgment Assessment by the Adjudicating Authority:
The Tribunal found that the adjudicating authority resorted to a 'Best Judgment Method' without verifying the sample invoices and documents provided by the appellant. The Tribunal held that the CA certificate and the methodology previously accepted should be the basis for final assessment, rejecting the 'Best Judgment' approach as it lacked concrete reasoning and disregarded the CA certificate without justification.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and granting consequential relief, if any, to the appellant. The Tribunal emphasized adherence to the previously approved methodology and the validity of the CA certificate in finalizing provisional assessments.