2024 (7) TMI 1396 - AT - Central Excise

CESTAT reverses appellate authority's order setting aside provisional assessments, rules mere change of opinion insufficient justification

M/s. Bharat Heavy Electricals Limited Versus Commissioner of CGST & Central Excise, Chennai

CESTAT Chennai allowed the appeal against the First Appellate Authority's order setting aside provisional assessments. The tribunal held that the ... Challenge to provisional assessment - mere change of opinion - Eligibility for abatement on the value of bought-out items in the absence of any findings by the adjudicating authority regarding the availment of CENVAT credit on such brought out items - non-verification of actual purchase price of bought-out items supplied directly to site. Whether the First Appellate Authority is justified in setting aside the provisional assessments? HELD THAT:- The Common/Final order of this Bench in the appellants own case for earlier periods in BHARAT HEAVY ELECTRICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPPALLI [2019 (3) TMI 1362 - CESTAT CHENNAI] which was relied upon by the appellant and we find that the facts are almost identical - it was held in the said case that 'once the appellants have not been found in breach of Guidelines contained in the Office Order dt. 22.12.2004 the finalization of provisional assessment indeed will naturally be treated to have done only following the said Order. It is also to be noted that certain verifications regarding the value and weight of DTS items and the items supplied by assessee’s units for all items covered by commercial invoices are required to be done periodically, to ensure that at the time of finalization of assessment there will not be any need to check even figures with respect to any documents other than the commercial invoice.' There are no change in the facts or the circumstances and that all the objections/contentions urged here by the Ld. Joint commissioner stand answered, that is to say, this Bench has considered all such grievances of the department and has answered such grievances by resting on the office memorandum. The crux of the findings thus appears to be that as long as the revenue does not have any grievance against the Office Memorandum and as long as the assessee is not found to have violated the terms and conditions in the said office memorandum, the same is binding on both the assessee as well as the revenue - thus, setting aside of the assessments by the First Appellate Authority was uncalled for and hence, there are no reasons to sustain the impugned order. The view of the First Appellate Authority is a mere ‘change of opinion’ and, as long as the view expressed by the Adjudicating Authority after following the guidelines in the Office Memorandum is not found to have resulted in revenue loss, setting aside the finalised assessments on account of ‘change of opinion’ is clearly impermissible in law and hence, unsustainable. The impugned order is set aside - appeal allowed. Issues Involved:1. Eligibility of abatement on the value of bought-out items in the absence of findings regarding the availment of CENVAT credit.2. Verification of the actual purchase price of bought-out items supplied directly to the site.Detailed Analysis:1. Eligibility of Abatement on the Value of Bought-Out Items:The core issue revolved around whether the assessee was entitled to claim abatement on the value of bought-out items supplied directly to the site, in the absence of findings by the Adjudicating Authority regarding the availment of CENVAT credit. The revenue contended that without such findings, the value of bought-out items should not be deducted from the total contract price. The First Appellate Authority supported the revenue's claim, emphasizing the need for detailed verification of CENVAT credit availment due to its direct impact on valuation and revenue. The Tribunal, however, noted that the original assessments were conducted in accordance with the guidelines in the Office Memorandum dated 22.12.2004, which did not necessitate such verification. The Tribunal concluded that the First Appellate Authority's decision to set aside the assessments was unjustified, as there was no evidence of revenue loss or non-compliance with the Office Memorandum.2. Verification of Actual Purchase Price of Bought-Out Items:The second issue was whether the actual purchase price of bought-out items supplied directly to the site was indicated and verified. The revenue claimed that the actual purchase price was neither indicated by the assessee nor verified by the Adjudicating Authority. The assessee argued that such verification was unnecessary since the DTS goods were duty-paid and already assessed at the supplier's end. The First Appellate Authority sided with the revenue, setting aside the assessments on the grounds that verification was essential. The Tribunal disagreed, citing previous judgments and the Office Memorandum, which accepted the commercial invoice values for abatement purposes. The Tribunal emphasized that the assessments were conducted in line with the Office Memorandum, and the revenue had not challenged this memorandum. Therefore, the Tribunal found no reason to sustain the First Appellate Authority's order.Conclusion:The Tribunal concluded that the First Appellate Authority's decision to set aside the provisional assessments was based on a mere change of opinion and not on any substantive evidence of non-compliance or revenue loss. The original assessments, conducted in accordance with the Office Memorandum, were upheld, and the appeals were allowed with consequential benefits as per law.