Invoice-wise finalisation of provisional assessment required; annual netting of excess and short duty payments rejected.

Provisional assessment under excise law remains linked to each clearance or invoice where duty or valuation is uncertain. Finalisation must therefore be done invoice-wise, and it cannot be converted into an annual netting exercise by setting off excess payment against short payment across the whole period. Board instructions were read as supporting return-wise or issue-wise finalisation with differential duty and interest, and the plea of revenue neutrality was rejected on the facts because excess credit at the smelting unit did not override the invoice-wise basis of assessment.

---

---

Issues: Whether finalisation of provisional assessment was required to be done invoice-wise without netting off excess payment against short payment for the entire period, and whether the plea of revenue neutrality could defeat the demand.

Analysis: Provisional assessment under the excise law is made where the rate of duty or valuation remains uncertain, but the assessment and duty liability remain relatable to the individual clearance/invoice at the time of removal. The finalisation mechanism therefore operates on the same footing and cannot be converted into an annual netting exercise merely because the profit margin becomes ascertainable only after the close of the financial year. The Board instructions also contemplate finalisation of the issue and return-wise assessment, with differential duty and interest payable accordingly. The plea of revenue neutrality was not accepted on the facts, and the excess payment already availed as credit at the smelting unit was not treated as a basis to override the invoice-wise finalisation of the short levy.

Conclusion: The finalisation of provisional assessment had to be done invoice-wise, the excess and short payments could not be netted off across the whole year, and the demand was sustainable; the issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeal failed because the short levy was correctly sustained on an invoice-wise basis under the provisional assessment scheme.

Ratio Decidendi: Where duty is provisionally assessed on uncertain valuation, finalisation must follow the clearance-wise or invoice-wise assessment basis and cannot be converted into a blanket annual adjustment by setting off excess payment against short payment across the entire period.

---