2017 (3) TMI 228 - AT - Central Excise

Tribunal rules in favor of appellant Hindustan Lever Ltd. on expense deductions dispute.

M/s. Hindustan Lever Ltd. Versus Commissioner of Central excise, Nashik

M/s. Hindustan Lever Ltd. Versus Commissioner of Central excise, Nashik - TMI Issues:1. Incorrect availment of deduction of expenses like sale tax, freight, octroi.2. Provisional assessment and finalization of expenses.3. Lower authorities' decision on deduction of expenses.4. Tribunal's direction on allowing deductions as per actuals.5. Imposition of penalty and interest.6. Commissioner not following Tribunal's directions.7. Penalty imposed under Section 173Q.8. Tribunal's ruling on penalty under Section 11AC.Analysis:1. The case involved the appellant, M/s. Hindustan Lever Ltd., being issued a show-cause notice for the demand of duty due to the incorrect availment of deductions for expenses such as sale tax, freight, and octroi. The lower authorities provisionally assessed the expenses, allowing certain deductions based on the lower of the actual and provisionally claimed expenses.2. Documents were submitted by the appellant for the finalization of the provisional assessment. The lower authorities allowed expenses based on the lower of the actual and provisionally claimed expenses, without considering if the actual expenses were higher than those claimed provisionally. The matter was adjudicated, and deductions for these expenses were permitted.3. The Tribunal remanded the matter back to the Commissioner, directing that deductions should be allowed based on actual expenses after hearing the appellant. The Tribunal also noted that penalties and interest cannot be imposed retroactively, citing a Supreme Court decision.4. The appellant argued that the Commissioner did not follow the Tribunal's direction to allow deductions based on actual expenses. Additionally, penalties and interest were imposed despite the Tribunal's ruling against such actions.5. The Tribunal found that the Commissioner did not follow its clear direction to allow deductions based on actual expenses. The demand was set aside due to this non-compliance. It was observed that penalties under Section 11AC could not be imposed, and the charge for penalty under Section 173Q had already been dropped.6. Consequently, the appeal was allowed by way of remand, instructing the Commissioner to decide the case afresh considering the Tribunal's directions and the previous order. The imposition of penalties under Section 173Q was deemed inappropriate, and the Commissioner was directed to reevaluate the case accordingly.