TaxTMI 
TaxTMI 
2019 (5) TMI 222
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....they were not opted for 'Provisional Assessment' in terms of Rule 7 of Central Excise Rules, 2002: c) Whether suo-motu adjustment of duty excesspaid in the months, with the duty short-paid in other months in permissible, if assessee have not produced any evidence before the authority to prove that, they have not passed on the burden to any body and borne incidence of duty themselves ? d) Whether the principle of unjust-enrichment is applicable to the present case, under which the assessee allowed by the Tribunal to adjust the duty excess-paid in the month, with the duty short-paid in other months, suo-motu? 2. The period in question is from 2007-2008 to 2013-2014. The issue pertains to entitlement of the assessee to adjustment between short paid duty and excess paid duty. 3. Being engaged inter-alia, in the manufacture of toilet soaps, soap noodles falling under Chapter 34 of the First Schedule to the Central Excise Tariff Act, 1985, assessee manufacturer sodium salt of fatty acid noodles (SSFA Noodles) of soaps of different flavours at its factory of Malanpur. It is an intermediate products for the manufacture of toilet soaps. Assessee clears SSFA N....
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.... recovery of Central Excise duty (including Cess) of Rs. 4,38,90,457/- (Rs. Four Crore Thirty Eight Lakh Ninety Four Hundred Fifty Seven Only) under proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944 (No. Section 11A (4) of Central Excise Act, 1944; (ii) I impose a penalty of Rs. 4,38,90,457/- (Rs. Four Crore Thirty Eight Lakh Ninety Four Hundred Fifty Seven Only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002. (iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA and erstwhile section 11AB of the Central Excise Act, 1944. (B) In respect of show cause notice bearing V(34)15- 01/2013/Adj.-1/24221 adjudicated vide OIO No.61/Commr/CEX/IND/2014 dated 3.7.2014 and de novo by CESTAT vide Final Order No.A/50797/2015- EX/[DB] dated 9.2.2015. (i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of Rs. 70,95,623/- (Rs. Seventy Lacs Ninety Five Thousand Six Hundred Twenty Three only) proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944 (under Section 11A(4) of ....
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....ersed the order, holding: "7. We have considered the submissions made by both sides. The goods have been cleared by the appellant to their own sister unit located in tax exempted areas. Consequently, the appellant is require to pay excise duty on goods so cleared. The basis of valuation is also required to be done in terms of Rule 8 of the Central Excise Valuation Rules, 2000 following the Cost Accountant Standards (CAS-4). It is not in dispute that valuation has been done properly as per CAS-4. However, such valuation has been done on the basis of CAS-4 certificate prepared on the basis of annual cost of production. The appellant has paid duty on a month to month basis on the basis of the cost of the goods for the previous month. When the valuation is finalised on an annual basis, there has been short payment of duty in some months as well as excess payment in other months. The appellant has already paid the excess duty wherever the value as per CAS-4 is more than the value adopted for payment of duty, but after adjusting the excess paid duty in other months. Such adjustment has not been permitted by the adjudicating authority even in the de nov....
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....ameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance. 7. Now, the question remains when at the time of each clearance of excisable goods for captive consumption the exact transaction value could not be arrived at the relevant time the duty has to be paid on a provisional basis and upon arriving at the costing applying CAS-4 and the assessable value in terms of Rule 8 of Valuation Rules final determination of duty liability has to be made. In the present case, admittedly no provisional assessment was resorted to by the appellant. Hence, the determination of actual cost much later on the clearance resulted in certain adjustments and payments by the appellant. 8. The appellants referred to guidelines issued by the institute of Cost & Works Accountants of India on CAS-4. We have perused the same. Para 8 deals with periodicity of CAS-4 Certificates. The guidelines state that the frequency of revising the certificate of cost of production will depend upon the significance in the changes in the cost due to various factors like input cost fluctuations, changes....
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....t that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to be considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable." 10. The appellant has claimed that they have already paid the short paid duty payable after deducting adjusting the excess. The adjudicating authority is directed to verify the same and recover only the differential , if any, after such adjustment." 8. Aggrieved department is in appeal. 9. It is urged that the assessee had determined the cost of production on monthly basis by taking budgeted conversion cost which was derived at by taking actual cost of raw material and packing material. Whereas, as per guidelines issued by CBEC vide Circular No.692/08/2003-CX-I dated 13.2.2003 he is required to determine the cost of production in terms of CAS-4 issued by....