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TMI Blog2011 (10) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... e central excise duties. The major buyer of these goods is M/s. Toyota Kirloskar Motors Pvt. Ltd, Bedadi, Bangalore . The assessee and the purchaser are interconnected undertakings and have business interests with one another in the context of Section 4(1)(b) of the Central Excise Act, 1944. The assessee requested the Assistant/Deputy Commissioner of Central Excise, Large Taxpayers Unit, Bangalore for assessment of goods manufactured and cleared by them to M/s.Toyota Kirloskar Motors Private Limited, Bidadi, Bangalore provisionally for the financial year 2007-08, Accordingly, the order dated 24.04.2007 came to be passed in terms of Rule 7 of the Central Excise Rules, 2007 and subject to execution of bond of Rs.50 lakhs with bank guarantee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of duty of Rs.1,77,20,157/- including Education Cess and Secondary & Higher Education Cess and the same is confirmed. However, the assessee in his letter dated 25.9.08 has undertaken not to claim any refund of duty paid which is refundable by the department for the financial year 2007-08 since the same has already been passed on to M/s. Toyota Kirloskar Motor and the same has been taken into account." 3. The assessee contended that if the total duty paid provisionally is taken into consideration, there was no short payment of duty at all. On the contrary, they had paid the excise duty in excess of Rs.1,66,56,740/- and therefore, the question of payment of interest on the ground of short payment of duty in respect of certain items would n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such amount as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, deem fit, binding the assessee for payment of difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. (3) The Assistant Commissioner of Central Excise of the Deputy Commissioner of Central Excise, as the case may be, shall pass order for final assessment, as soon as may be, after the relevant information, as may be required for finalizing the assessment, is available, but within a period not exceeding six months from the date of the communication of the order issued under sub-rule (1): Provided that the period specified in this sub-rule may, on sufficient cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. A perusal of the aforesaid provision makes it clear that, where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the competent authority as provided in the said provision, to permit him to pay the duty on provisional basis at such rate or on such value as may be specified by him. If the authority is satisfied, he may pass an order permitting such payment and taking all necessary steps for payment of any short fall in the duty payable at the end of assessment. Thereafter, a final assessment order is to be passed. If after the final assessment; if it is found that there is a short fall in payment of duty, sub-rule (4) provides for payment of interest on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, payment of interest does not arise, They have treated the duty payable under two categories. It was found in respect of some items the duty payable after the final order is more than what was paid under provisional assessment. The approach of the authorities in this regard is erroneous, unwarranted and unsupported by any statutory provision. If we keep in mind the principle underlying the provisions, it is only when the duty is due and it is not paid within the stipulated time and the duty is paid thereafter, in order to compensate the revenue, interest is imposed. If that is to be kept in mind, in the instant case, when the assessee has paid a sum of Rs.1,66,56,740/- excess duty which is entitled to claim refund, he cannot be taxed w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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