2015 (10) TMI 134 - AT - Central Excise

Tribunal restores original order, upholds Revenue's appeal on time-barred recovery notice.

The Tribunal set aside the Commissioner (Appeals) order and restored the Assistant Commissioner's Order-in-Original, allowing the Revenue's appeal. The ... Disallowance of trade discounts - Provisional assessment - Held that:- The present proceedings originated when this Jurisdictional Superintendent, Central Excise in pursuance of the Assistant Commissioner’s order 24-1-1997, finalizing the provisional Assessment, directed the Superintendent to quantify the duty demand. The Superintendent, Central Excise quantified the duty demand on the basis of the Assistant Commissioner’s order dated 24-1-1997 and this show cause notice had been issued only for the purpose of quantification, subsequent to finalization of provisional assessment. When the Assistant Commissioner’s Order dated 24-1-1997 has been upheld by the Commissioner (Appeals) vide Order-in-Appeal dated 17-9-2004 and appeal to Tribunal against that order had also been dismissed, the Commissioner (Appeals) could not reopen the finalization of provisional assessment on merits by observing that the Order-in-Original dated 24-1-1997 of the Assistant Commissioner finalizing the provisional assessment was ex parte order or that the same was not correct. Moreover, since the assessments were provisional, the limitation period under Section 11A(1) would not apply. - Decided against assessee. Issues:1. Disallowance of trade and cash discounts not declared in the price list during a specific period.2. Finalization of provisional assessment leading to a demand for differential duty.3. Appeal against the Commissioner (Appeals) order regarding the time-barred demand and applicability of Apex Court judgment.Issue 1 - Disallowance of Discounts:The appeal involved a dispute regarding the disallowance of trade and cash discounts given by the manufacturers to certain customers without declaration in the price list during the period from April 1992 to October 1996. The Assistant Commissioner disallowed the deduction of these discounts in the final assessment, leading to an appeal by the manufacturers. The Commissioner (Appeals) upheld the Assistant Commissioner's order, and a subsequent appeal to the Tribunal was dismissed for non-prosecution.Issue 2 - Finalization of Provisional Assessment:Following the Assistant Commissioner's order finalizing the provisional assessment, a show cause notice was issued to the manufacturers to recover the differential duty amount. The Commissioner (Appeals) set aside the Assistant Commissioner's order on the grounds that it was ex parte and that the demand for differential duty was time-barred. The Commissioner (Appeals) also cited the Apex Court judgment regarding the assessable value in clearances made to depots and consignment agents.Issue 3 - Appeal Against Commissioner (Appeals) Order:The Revenue filed an appeal against the Commissioner (Appeals) order, arguing that the finalization of the provisional assessment had been decided previously and could not be reopened. The Revenue contended that the extended period for demand was applicable in this case and that the Commissioner (Appeals) erred in his observations. The Tribunal, after considering the submissions, found that the Commissioner (Appeals) could not reopen the finalization of the provisional assessment on merits. The Tribunal held that since the assessments were provisional, the limitation period under Section 11A(1) did not apply, and therefore, the show cause notice was not time-barred. Consequently, the Tribunal set aside the Commissioner (Appeals) order and restored the Assistant Commissioner's Order-in-Original, allowing the Revenue's appeal.This detailed analysis of the judgment highlights the issues of disallowance of discounts, finalization of provisional assessment, and the appeal against the Commissioner (Appeals) order, providing a comprehensive understanding of the legal proceedings and outcomes.