Custom, Excise & Service Tax Tribunal
Ultra Plus Lubes Pvt Ltd vs Commissioner Of Central Excise And ... on 13 March, 2024
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. 2
EXCISE APPEAL NO: 85386 OF 2015
[Arising out of Order-in-Appeal No: CD/25/RGD/2014 dated 10th November
2014 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-
II.]
Ultraplus Lubes Pvt Ltd
Plot No. 53,14, 13, Jawahar Industrial Estate
Kamothe, Panvel, Dist: Raigad ... Appellant
versus
Commissioner of Central Excise
Raigad
Plot No.1, Sector 17, Khandeshwar
Navi Mumbai- 410206 ...Respondent
APPEARANCE:
Shri Hanisha Jatania, Chartered Accountant for the appellant Shri P K Acharya, Superintendent (AR) for the respondent CORAM:
HON'BLE MR C J MATHEW, MEMBER (TECHNICAL) HON'BLE MR AJAY SHARMA, MEMBER (JUDICIAL) FINAL ORDER NO: 85413/2024 DATE OF HEARING: 14/03/2024 DATE OF DECISION: 14/03/2024 PER: C J MATHEW The appellant, M/s Ultraplus Lubes Pvt Ltd, manufactured 'lubricants' for M/s Volvoline Cummins Ltd, and their appeal E/85386/2015 2 before us challenges order1 of Commissioner of Central Excise (Appeals), Mumbai Zone - II, which upheld the demand of differential duty of central excise of ₹ 49,24,479/-, under rule 7(2) of Central Excise Rules, 2002, along with interest thereon, and rejection of the plea of the appellant for adjustment against excess duty of ₹ 94,07,448/- discharged for the same period while finalizing 'provisional assessment' for the period from April 2008 to September 2008 to demand.
2. The appellant supplies 'lubricant oil' in packs exceeding '25 litres' exclusively to depots of M/s Volvoline Cummins Ltd and removals from their factory were effected on payment of duties of central excise. However, as 'place of removal' includes depots and depot sales of M/s Volvoline Cummins Ltd involve certain discounts which would be known only at that subsequent stage, the clearances were effected on 'provisional assessment', by resort to rule 7 of Central Excise Rules, 2002, with permission accorded by the jurisdictional Deputy Commissioner of Central Excise. Thereafter, details of the discount allowed were furnished to the jurisdictional central excise authorities vide their letters dated 16th November 2009, 27th October 2009, 30th November 2009 and 18th February 2010 along with computation of clearances relating to duty that had been short- paid and that paid in excess to enable finalization of assessment. The 1 [order-in-appeal no. CD/25/RGD/2014 dated 10th November 2014] E/85386/2015 3 short-payment computed by the appellant was adopted to order recovery along with interest. The upholding of the recovery by the first appellate authority, determined in default for non-payment of pre- deposit, was set aside by the Tribunal in final order2 and remanded to the original authority for re-adjudication upon compliance with principles of natural justice. In the impugned order, which upheld the same findings as had had been set aside in the remand order of the Tribunal, the same certification furnished by the appellant on short- payment of duty to the extent ₹ 49,22,479/- was accepted even as the computation of excess duty paid for the same period was discarded. Furthermore, it was also held that adjustment of the two was not permissible owing to the operation of bar of unjust enrichment which, according to the lower authorities, plagued claim of the appellant to be entitled to the refund.
3. Learned Counsel for appellant submitted that the order of the lower authorities is patently incorrect inasmuch as the principal dispute on applicability of resort to rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, which was the genesis of the proceedings, had not been adjudicated upon. It is also submitted that the disallowance of adjustment of excess duty paid by them towards short-payment was not in line with the decisions of the Tribunal in Tata Oil Mills Co Ltd v. Collector of 2 [no. A/111/12/EB/C-II dated 2nd January 2012] E/85386/2015 4 Central Excise [1990 (46) ELT 438 (Tribunal)] and in Goetze Tp (India) Ltd v. Commissioner of Central Excise, Bangalore - II [2009 (248) ELT 483 (Tri. - Bang.)] as well as that of the Hon'ble High Court of Karnataka in Toyota Kirloskar Auto Parts Pvt Ltd v. Commissioner of Central Excise, LTU, Bangalore [2012 (276) ELT 332 (Kar.)]. It was also submitted that the certificate of Chartered Accountant found fit for determination of duty short-paid was selectively rejected as evidence of incidence of duty having been borne by them. It is also submitted that other documentation could also be produced in support of this very stand.
4. We have heard Learned Authorised Representative who submitted that the original authority had assigned proper reasons for not enabling the adjustment of duties paid in excess.
5. The scheme of provisional assessment under Central Excise Rules, 2002 is intended to be resorted to in circumstances of non- availability of the value of the goods that are chargeable to duty on selling price at the time and place of removal, at the time of clearance from factory of manufacturer. In accordance with the terms and conditions attached to rule 7 of the Central Excise Rules, 2002, the competent authority is required to finalise the assessment on the basis of details submitted by the assessee. Impliedly, the competent authority was required to issue an appropriate order demanding the E/85386/2015 5 difference in duty that the assessee was, but for lack of details then, required to have discharged at the time of clearance. In the order of the original authority which merely adopted the computation provided by the assessee and, even so, only to the extent of duty short-paid, we perceive no such finding. The order for finalization is not to be restricted to select clearances but should be for the entirety of transactions that were subject to duty by provisional assessment. The order of the original authority is patently lacking in the essence of adjudication and first appellate authority has compounded that lack by failing to engage on these lacunae. An order of assessment pertaining to clearances which were effected provisionally should necessarily encompass over-payment and short-payment for netting duty to be collected as difference or excess that is, by law, forbidden to be retained. There is no scope for computation of both independently for recovery and for refund. To that extent, the orders of the lower authorities are not consistent with the requirement of rule 7 of Central Excise Rules, 2002.
6. It would appear that the remand order of the Tribunal, exhorting proper disposal of the show cause notice in conformity with the principles of natural justice, has been observed in its breach. The reaffirmation of the demand without considering direction in order of the Tribunal and in disregard of other judicial decisions warrants fresh disposal in terms of the remand for which E/85386/2015 6 purpose we set aside the impugned order and restore the dispute to the original authority.
7. The appeal is, accordingly, disposed off by way of remand to the original authority.
(Operative Part of the Order Pronounced in Open Court on 14th March 2024) (AJAY SHARMA) (C J MATHEW) Member (Judicial) Member (Technical) */as