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TMI Blog2019 (5) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... o.13/2019 - - - Dated:- 23-4-2019 - Shri Justice Sanjay Yadav And Shri Justice Vivek Agarwal For the Appellant : Shri Praveen Surange, learned counsel JUDGMENT PER SANJAY YADAV, J. 1. The Department vide this appeal under Section 35G (1) of Central Excise Act, 1944 takes exception to final order No.A/58465/2017-EX[DB] dated 20.12.2017 passed by Customs, Excise Service Tax Appellate Tribunal on the following substantial questions of law, as proposed by the appellant: a) Whether, the Hon'ble Tribunal has committed error of law in permitting adjustment of duty liability against the duty excess-paid in the month, with the duty shortpaid in other months, when they were assessed duty under Rule 8 of Central Excise Rules, 2002, suo-motu? b) Whether, the assessee can adjust the duty excesspaid in the month with the duty short-paid in other months, when they were not opted for 'Provisional Assessment' in terms of Rule 7 of Central Excise Rules, 2002: c) Whether suo-motu adjustment of duty excesspaid in the months, with the duty short-paid in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moving Average Price Method which was redundant in view of the guidelines issued by the CBEC vide Circular No.6921/08/2003-Cx.I dated 13.2.2003 which required assessee to determine the cost of production in terms of CAS-4 issued by ICAI for the purpose of Rule 8. As there was no provisional assessment, differential duty was demanded for various periods by disregarding the excess payments made by the assessee. 6. The show cause notices for various periods were issued which were originally adjudicated and the differential duty confirmed. However, in appeal the Tribunal remanded the matter for de novo decision. On remand fresh order were passed on 25.8.2016; whereby in respect of five show cause notices following decision was taken. ORDER (A) In respect of show cause notice bearing V(34)15- 01/2010/Adj.-1/34916 dated 31.11.2011 adjudicated vide OIO No.15-16/Commr/CEX/IND/2013 dated 10.4.2014 and de novo by CESTAT vide Final Order No.A/52755/2014-EX/[DB] dated 7.7.2014. (i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of ₹ 4,38,90,457/- (Rs. Four Crore Thirty Eight L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944. D. In respect of show cause notice bearing C.No.V(34)15-01/2015/Adj.-1/2859 dated 19.03.2015. (i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of ₹ 1,50,53,136/- (Rs. One Crore Fifty Lakh Three Thousand One Hundred Thirty Six only) under Section 11A (4) and proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944; (ii) I also impose a penalty of ₹ 1,50,53,136/- (Rs. One Crore Fifty Lakh Three Thousand One Hundred Thirty Six only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002; (iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA of the Central Excise Act, 1944. E. In respect of show cause notice bearing C.No.IV(6)16/2010/Prev/31799, dated 14.12.2011. I drop the proceedings initiated under the above show cause notice as infractous. 7. The Tribunal while relying on the decision in Jindal Steel Power Ltd. Vs. Raipur-1-2016 (342) ELT 253 (Tri. Delhi) and Essar Steel India Ltd. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on costing should be at the time of removal. It was submitted that the scheme of things for excise duty purposes in terms of Section 4 and Rules made thereunder and Central Excise Rules, the duty liability based on self-assessment has to be discharged at the time of removal of goods when the invoices are prepared. The legal position as submitted by the appellant cannot be contested. However, it is an admitted fact that the appellants themselves did not follow costing to arrive at deemed transaction value for each clearance. They have considered a period of many months and worked out the costing, in terms of CAS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing yer of the company. To that extent we find the CAS-4 cost price arrived at on annual basis by the Revenue is correct procedure. 10. The next issue for decision is on the quantification of differential duty. Even though there is no provisional assessment in the present case, the duty determination on the inter-unit transfer is made on annual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrive at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me months within same year, which in the present case in our considered, will not be attracted because the assessment has been final. In view whereof the decision by Full Bench of the Tribunal in Excel Rubber Ltd. Vs. Commissioner of Central Excise 2011 (268) ELT 419 relied by the appellant is of no help to the Revenue because the same borders around Rule 7, which apparently is not attracted in the present case. 11. In the case at hand, the Tribunal has relied on its own decision in Essar Steel India Ltd. Vs. CCE, Raipur-2017 (345) ELT 139, wherein while dwelling on the issue of quantification of duty, it is held: 10. The appellant has claimed that they have already paid the short paid duty payable after deducting adjusting the excess. The adjudicating authority is directed to verify the same and recover only the differential , if any, after such adjustment. 12. The decisions relied by the appellant in M/s Mahindra Ungine Steel Co. Ltd. V/s CCE Pune, 2012 (278)ELT 215 (Tri. Mumbai) are of no assistance, because in these cases there was no evidence on record that the incidence of duty is not passed. In the present case it is an inter un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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