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Adjustment of short / excess excise duty paid during assessment

On finalisation of the provisional assessment, it was revealed that there was some short duty paid by the assessee and there was some excess duty paid by them. It is held that Assessee is entitled for adjustment of excess duty paid with the short paid duty during the period of provisional assessment.

On finalisation of the provisional assessment, it was revealed that there was some short duty paid by the assessee and there was some excess duty paid by them.  It is held that Assessee is entitled for adjustment of excess duty paid with the short paid duty during the period of provisional assessment.  

BRIEF FACTS

The Appellant is engaged in the manufacture of automotive IC Engine and was working under the provisional assessment for the period 01.04.2006   to 31.03.2007 which was finalised only on 16.11.2007.

On finalisation of the provisional assessment, it was revealed that there was some short duty paid by the assessee and there was some excess duty paid by them. The matter was adjudicated by the original adjudicating authority, who neutralised the short paid duty with the excess paid duty and granted refund of Rs.10 lakhs to the Appellant.

Being aggrieved with the order of the Adjudicating Authority, Revenue filed the appeal before Commissioner (Appeal) who reversed the order on the ground that short paid duty cannot be adjusted against excess paid duty.

Hence, the Appellant filed the appeal before the Hon’ble Tribunal against the order of Commissioner (Appeals).

TRIBUNAL’s ORDER

It was agreed by the Appellant and the Department that short issue is adjustment of short and excess paid duty by the Appellant during the period of provisional assessment.

The said short issue was the subject matter of the Tribunal’s decision in the case of Hindustan Zinc Ltd. vs. CCE Jaipur [2015-TIOL-2427-CESTAT-DEL], where originally there was difference of opinion between two Members and the issue was resolved by third Member. In terms of majority decision, arrived at in the above referred case, the assessee is entitled for adjustment of excess duty paid with the short paid duty during the period of provisional assessment.

Applying the ratio of the said decision, the Hon’ble Tribunal was of the view that the order of Commissioner (Appeals) has no merits. Accordingly, the same was set aside.

The order of the adjudicating authority was restored wherein the adjustment was made by neutralising the short paid duty with the excess paid duty and granted refund to the Appellant.

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About Author:  Sumit Wadhwa has a Bachelor’s degree in Commerce from the University of Delhi and holds Professional Affiliation to the Bar Council of Delhi. He is also a company secretary from the Institute of Company Secretaries of India and can be reached at Mob: +91- 97187 04960 / Email: sumit.wadhva08@gmail.com)

Categories: Excise Duty
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