2024 (7) TMI 922 - AT - Central Excise

Provisional assessment under Rule 7 of the Central Excise Rules, 2002 - inability to determine the grade of their coal - HELD THAT - It is agreed that at the time of clearance of coal from the respondent s premises, the grade of coal was not known and the same is to be done at the end of DVC as per the joint venture agreement and after arriving at the grading of the coal by DVC, M/s Coal India Limited has fixed the price and on that price, the duty is payable by the respondent - Admittedly, at the time of clearance of coal from the premises by the respondent, the value of coal is not known. In that circumstances, the respondent is entitled to claim the provisional assessment in terms of Rule 7 of the Central Excise Rules, 2002, which has been allowed by the ld.Commissioner (Appeals) in the impugned order. There should be no interference in the impugned order and the same is upheld - appeal filed by the Revenue is dismissed.

Summary

Issues:
- Appeal against the impugned order allowing provisional assessment under Rule 7 of the Central Excise Rules, 2002.
- Dispute over the determination of coal grade affecting the assessment of duty.
- Interpretation of Rule 7 regarding the inability to determine the value of excisable goods.

Analysis:
The appeal before the Appellate Tribunal concerned the Revenue's challenge against the order permitting provisional assessment under Rule 7 of the Central Excise Rules, 2002. The respondent had applied for provisional assessment due to the inability to ascertain the grade of coal at the time of clearance from their premises. This lack of knowledge regarding the coal grade impacted the determination of the value and duty payable on the coal. The Revenue contended that Rule 7 is applicable only when the assessee cannot determine the value of goods or the duty rate, emphasizing that the respondent should have had the testing facility to determine the coal grade themselves.

Upon reviewing the case, the Tribunal noted that the grade of coal was indeed unknown at the time of clearance from the respondent's premises, and it was the responsibility of DVC, as per the joint venture agreement, to determine the coal grade. Subsequently, M/s Coal India Limited set the price based on this grading, which then determined the duty payable by the respondent. As the value of coal was not known at the time of clearance, the Tribunal upheld the respondent's right to claim provisional assessment under Rule 7, a decision previously supported by the Commissioner (Appeals).

Consequently, the Tribunal found no grounds to interfere with the impugned order and dismissed the Revenue's appeal. The ruling affirmed the respondent's entitlement to provisional assessment under Rule 7 of the Central Excise Rules, 2002, given the circumstances surrounding the determination of coal grade and its impact on the assessment of duty. The judgment highlighted the importance of adhering to contractual agreements and industry practices in determining the value of excisable goods for duty purposes.