Provisional assessment adjustment allows excess duty to offset short payment, limiting recovery to the net shortfall only.

On finalisation of provisional assessment, excess excise duty paid on some clearances may be adjusted against short payment for the same period, so the duty liability must be netted across the entire assessment period and only any remaining shortfall can be recovered. The note states that later authorities departed from the earlier Excel Rubber Ltd. view and followed the principle in Toyota Kirloskar Auto Parts Pvt. Ltd., under which the Revenue cannot demand differential duty without first accounting for duty already paid during the relevant period. The settled line of authority was applied to reject the contrary approach.

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Issues: Whether, on finalisation of provisional assessment, excess excise duty paid on some clearances could be adjusted against short payment determined for the same period, and whether the Revenue's demand for differential duty was sustainable.

Analysis: The Tribunal noted that the question was no longer res integra and that later decisions had departed from the earlier view in Excel Rubber Ltd. and followed the principle laid down by the Karnataka High Court in Toyota Kirloskar Auto Parts Pvt. Ltd. The Tribunal also noticed subsequent Tribunal decisions holding that, for provisional assessment, the total duty payable on all clearances for the relevant period must be considered together, and only the net shortfall, if any, can be demanded. On that basis, the earlier contrary view was treated as having no relevance on the facts before it, and no reason was found to deviate from the settled line of authority.

Conclusion: The adjustment of excess duty paid against short payment arising on finalisation of provisional assessment was held to be permissible, and the Revenue's appeal was rejected.

Ratio Decidendi: On finalisation of provisional assessment, the duty liability for the entire period must be netted off against duty already paid, and only any remaining shortfall can be recovered.

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