Like-for-like quantification required for clandestine clearance demands; cum-duty benefit remains settled by precedent.

Quantification of alleged clandestine clearances must be done on a like-for-like basis, either gross with gross or net with net; mixing assessable values with values inclusive of duties and taxes makes the demand unsustainable in its existing form and calls for fresh adjudication and re-quantification. In the de novo proceedings, the assessee may also raise connected objections on chits, the applicable rate of duty under Rule 9A, and interest under Section 11AB. Cum-duty benefit remains settled by binding precedent, so the Revenue's challenge to that treatment does not survive.

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Issues: (i) Whether the demand arising from alleged clandestine clearances had been correctly quantified by comparing gross figures from one balance sheet with net figures from the other balance sheet, and whether the matter required remand for re-adjudication; (ii) whether the assessee was entitled to cum-duty value, and the Revenue's challenge on that issue could succeed.

Issue (i): Whether the demand arising from alleged clandestine clearances had been correctly quantified by comparing gross figures from one balance sheet with net figures from the other balance sheet, and whether the matter required remand for re-adjudication.

Analysis: The demand was founded on a comparison between the official and unofficial balance sheets. The correct exercise for quantification required either a gross-to-gross comparison or a net-to-net comparison, so that the figures compared were of the same character. As the department had mixed assessable values with values inclusive of duties and taxes, the quantification could not be sustained in its existing form. The appellant was also permitted to urge, in the de novo proceedings, the ancillary objections relating to the portion of demand based on chits, the applicable rate of duty under Rule 9A, and the levy of interest under Section 11AB.

Conclusion: The demand was not finally sustainable on the existing quantification and the matter was remanded to the Commissioner for fresh adjudication and re-quantification.

Issue (ii): Whether the assessee was entitled to cum-duty value, and the Revenue's challenge on that issue could succeed.

Analysis: The entitlement to cum-duty benefit was no longer res integra and had already been settled by binding precedent. In view of that settled position, the Revenue's objection to grant of cum-duty value did not survive.

Conclusion: The assessee was entitled to cum-duty value and the Revenue's appeal failed on this issue.

Final Conclusion: The assessee's matter was sent back for fresh decision on quantification and connected questions, while the Revenue's challenge to cum-duty treatment was rejected.

Ratio Decidendi: For quantifying clandestine clearances, the comparison must be made on a like-for-like basis, namely gross with gross or net with net, and settled entitlement to cum-duty value cannot be reopened contrary to binding precedent.

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