Set-off of excise duty on match inputs to be reconsidered on available records in a pre-payment banderol system.

In the trade of safety matches, where finished goods were cleared under a pre-payment system through banderols, the assessee could not reasonably be expected to claim set-off of excise duty on inputs at the time of clearance in the usual manner. The earlier refusal was therefore reconsidered in light of an identical Tribunal view that entitlement to relief should be examined on the basis of available records. The matter was remanded for fresh consideration by the Assistant Collector, with an opportunity to grant set-off to the extent duty paid on inputs could be established from the records.

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Issues: Whether the assessee was entitled to have its claim for set-off of excise duty on inputs reconsidered and allowed on the basis of available records, notwithstanding the earlier refusal on the ground that set-off had not been claimed at the time of clearance of the finished goods.

Analysis: The claim had been rejected because the finished matches were cleared without availing set-off at that stage, but the nature of the trade in safety matches involved pre-payment through banderols, so the assessee could not reasonably have claimed set-off at clearance in the ordinary manner. The earlier Tribunal decision in an identical situation had held that, in the peculiar facts surrounding matches, the assessee should be given an opportunity to establish entitlement to relief from the available records before the Assistant Collector.

Conclusion: The matter required fresh consideration by the Assistant Collector, with an opportunity to grant relief to the extent the assessee could establish duty paid on inputs from the records available. The appeal succeeded and the prior orders were set aside, with remand for reconsideration.

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