Provisional assessment finalisation should use net adjustment, not invoice-wise segregation of short levy and excess payment.

Finalisation of provisional assessment under Rule 7 of the Central Excise Rules, 2002 does not prima facie require invoice-wise segregation of short-levy and excess payments where a net adjustment approach is available. The Tribunal noted that the Department's method of demanding duty on short-levy clearances while leaving the assessee to seek separate refunds for excess payments appeared cumbersome and found no apparent sanction for that approach in Rule 7. On that basis, the assessee was held entitled to interim protection by way of waiver and stay of the dues arising from the impugned order.

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Issues: Whether, in finalisation of provisional assessment, the Department could proceed invoice-wise by demanding duty on short-levy clearances while leaving the assessee to claim separate refunds for excess payments, or whether the excess and short payments were required to be adjusted on a net basis.

Analysis: The Tribunal noted that the goods had been cleared under provisional assessment and that, on finalisation, the Department had adopted an invoice-wise segregation of short levy and excess payment. It observed that such a method appeared cumbersome and found no apparent sanction for it in Rule 7 of the Central Excise Rules, 2002, which governs finalisation of provisional assessment. On that prima facie view, the Tribunal considered that the assessee had shown sufficient ground for interim protection.

Conclusion: Invoice-wise finalisation was not prima facie supported, and the assessee was entitled to waiver and stay of the dues arising from the impugned order.

Ratio Decidendi: Finalisation of provisional assessment under Rule 7 of the Central Excise Rules, 2002 does not prima facie warrant invoice-wise segregation of short levy and excess payment where a net adjustment approach is available.

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