The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that excise duty cannot be demanded on the payment of differential duty along with the interest on the finalization of value after clearance of goods.
General Manager (Finance & Accounts), the appellant assessee was a public sector unit located in Jhansi. For various reasons the value of the goods could not have been determined at the time of clearance. All the contracts which were entered into for supply of Large Thermal/ Hydropower and the transmission Project & with Indian Railways had a price variation clause and the prices were finalized subsequently after three to four years for the finalization of the prices by the Ministry of Heavy Industries & Ministry of Railways. Differential duty was paid on finalization of the assessment on the value so determined finally.
The assessee appealed against the order passed by the Commissioner (Appeals) for denial of permission to make the assessment provisional for the period from January 2017 to June 2017.
Z.U. Alvi, the counsel for the assessee contended that the value of the goods cleared was not determined at the time of clearance that the assessments are made provisionally so that the differential duty would be recovered on finalization of the assessment and from the date of clearance in 2017, in all the cases, the assessee determined the final value and paid the differential duty along with the interest
Also submitted that Provisional assessment was a facility to the revenue to keep the assessments alive and not to the person claiming for provisional assessment which was on account of the reason that the correct value for the rate could not have been determined.
Santhosh Kumar, the counsel for the department contended that the permission for provisional assessment under Rule 7 (i) of the Central Excise Rules 2002 was to be applied for and granted monthly.
The Bench observed that in the case of Bharat Heavy Electricals Limited, the court held that on payment of differential duty along with interest on finalization of value after the clearance of goods, no further action was made against the assessee except in case where the duty had been short paid, for any reason in pursuance of the impugned order which otherwise by the lapse of time had become inconsequential.
The two-member bench comprising P K Choudhary (Judicial) and Sanjiv Srivastava (Technical) allowed the permission to make assessment provisional for the period from January 2017 to June 2017 while allowing the appeal filed by the assessee.
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