Revenue neutrality defeated differential duty demand on finalised provisional assessments, with credit available at packing stations.

Differential duty demanded on finalisation of provisional assessments was treated as unsustainable where duty paid on bulk clearances was available as credit at the packing stations, making the arrangement revenue neutral. The Tribunal held that immediate payment of the additional duty would not serve any revenue purpose because the same duty would again be available as credit against future liability, and would only impose an unintended financial burden caused by delay in finalising the assessments. Relief was granted on that basis without examining the valuation dispute on merits, though the undisputed demand was confirmed.

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Issues: Whether differential duty demands raised upon finalisation of provisional assessments were sustainable where the duty paid on bulk clearances was available as credit at the packing stations and the situation was revenue neutral.

Analysis: The duty paid at the factory on bulk clearances was available as credit for duty on re-packed goods at the packing stations. The assessee had already paid substantial duty at the packing stations, and the additional duty demanded on finalisation would also have been available as credit for future duty liability. In these circumstances, insistence on immediate payment of the differential duty was found to serve no revenue purpose and to create an unintended financial burden only because of the delay in finalising the provisional assessments. The Tribunal therefore treated the matter as revenue neutral and granted relief without entering into the merits of the valuation dispute.

Conclusion: The differential duty demands arising from finalisation of the provisional assessments were set aside in favour of the assessee, except for the undisputed demand which was confirmed.

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