2022 (1) TMI 1014 - AT - Central Excise

Appeal allows adjustment of excess payment against short payment in duty liability determination

The appeal focused on duty liability determination based on the valuation of goods and the adjustment of excess payment against short payment by the ... Valuation - clearance of HTS wire to their sister concern for pressed concrete slippers by the said sister concern - non-compliance of Rule 8 and Rule 9 of Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 - rejection of declared value on the ground that Department has been of the opinion that in the given scenario the duty should have been paid by the appellant on the value of goods at 110% of the cost of production of such goods and would have provided CAS- 4 - whether excess payment made during a particular period can be adjusted towards the short payment of another period? - HELD THAT:- Tribunal Ahmedabad in case of M/S SUZLON ENERGY LTD VERSUS COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX-VADODARA-I [2015 (10) TMI 1242 - CESTAT AHMEDABAD] has held that in a case of inter-unit transfer of goods by the appellant’s own company and that where the appellant had paid excess duty as well as some short payment of duty amount of CAS-4 since there was no sale of goods involved the adjustment of excess against the short payment is permissible. Decision of Tribunal Mumbai in the case of BAJAJ TEMPO LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [2004 (7) TMI 145 - CESTAT, MUMBAI] was followed. In the appellant’s own case in the appeals as mentioned by the appellant in the same facts and circumstances in M/S. PATIL RAIL INFRASTRUCTURE PVT. LTD. VERSUS C.C.E. & S.T. JAIPUR-I [2019 (3) TMI 851 - CESTAT NEW DELHI], the setting off of the excess payments against the short payment of duty during a subsequent period has already been allowed there are no reason to differ from the adjudications. The adjudicating authority below has failed to consider the CAS-4 certificate issued by the authorised auditors proving the excess payments of duty made by the appellant in terms of Rule 9 read with Rule 8 of the valuation rules. The certain short payments in terms of all these rules have wrongly been denied to be set off against the said excess - Appeal allowed - decided in favor of appellant. Issues:- Duty liability determination based on valuation of goods- Adjustment of excess payment against short payment by the assesseeAnalysis:1. Duty Liability Determination Based on Valuation of Goods:- The appellants, engaged in manufacturing HTS wires, were observed by the Department for not determining the duty payable on 3x3 ply HTS wires given to their sister concern for manufacturing pressed concrete sleepers. The Department proposed recovery of alleged short paid duty along with penalties. The Order-in-Original confirmed the proposal, leading to the appeal.- The appellants submitted CAS-4 valuation and reworked the duty, revealing an excess payment of Rs. 6,82,309.88 during the impugned period. They filed invoices and a certificate by a cost accountant to support the excess payment claim. However, the adjudicating authorities failed to consider these documents and denied setting off the excess payment against short payments.- The main issue was whether the excess payment from one period could be adjusted against short payments from another period. The Department did not deny the excess payment but refused to allow the set off.2. Adjustment of Excess Payment Against Short Payment by the Assessee:- The Tribunal analyzed the legal permissibility of adjusting excess payments against short payments. Referring to precedents, the Tribunal held that there was no legal prohibition for such set off. Citing cases like Essar Steel India Ltd. vs. Commissioner of C. Ex., Raipur and Suzlon Energy Ltd. vs. Commr. C. Ex., Cus. & ST Vadodara-I, the Tribunal emphasized that in cases of inter-unit transfers where excess and short payments occurred, adjustment was permissible.- The Tribunal noted that in the appellant's own case, similar set offs had been allowed in the past. Therefore, the adjudicating authority's failure to consider the CAS-4 certificate proving excess payments and denying set off against short payments was deemed incorrect. Consequently, the order under challenge was set aside, and the appeal was allowed.This detailed analysis of the judgment highlights the issues of duty liability determination and the adjustment of excess payments against short payments by the assessee, providing a comprehensive understanding of the legal reasoning and precedents considered by the Tribunal in reaching its decision.