Assessable value reconciliation defeats excise demand where consolidated accounts include sales and inter-unit transactions of another unit.

Central excise duty cannot be demanded by comparing the Sanchor unit's ER-1 assessable value with sales in consolidated financial statements that also include the Mumbai unit. The reconciliation showed inter-unit consignment transactions and established that the Sanchor unit's ER-1 reported sales exceeded the sales reflected in the financial statements. No unreconciled difference in assessable value therefore remained. The alleged short reporting in the ER-1 return could not sustain the duty demand, and no consequential penalty was imposable.

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Issues: Whether central excise duty could be demanded on the alleged difference between the assessable value reported in the ER-1 return for the Sanchor unit and sales reflected in the consolidated balance sheet.

Analysis: The demand compared the ER-1 figures of the Sanchor unit with consolidated financial-statement sales that included the Mumbai unit. The reconciliation established that the units undertook inter-unit consignment transactions and that the Sanchor unit's sales reported in the ER-1 return exceeded its sales reflected in the financial statements. Accordingly, no unreconciled difference in assessable value remained.

Conclusion: The duty demand founded on the alleged short reporting in the ER-1 return is unsustainable, and the consequential penalty is not imposable.

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