Customs, Excise and Gold Tribunal - Delhi
Shriram Pistons & Rings Ltd. vs Commissioner Of C. Ex. on 7 November, 2002
Equivalent citations: 2003(86)ECC470, 2003(152)ELT359(TRI-DEL)
ORDER
K.K. Usha, J. (President)
1. Issue raised in this appeal at the instance of the assessee is whether it is open to the Assessing Authority while finalizing the provisional assessment to appropriate the securities furnished for the subsequent period in respect of which no duty demand is raised against the assessee.
2. The Assistant Commissioner finalized the provisional assessment for the period October, 1980 to September, 1996 under Order-in-Original No. 25/2000, dated 19-4-2000. Under a separate proceedings vide Order No. 49/2000, dated 14-7-2000 provisional assessment for the period October, 1996 to March, 2000 was finalized. While passing the order dated 19-4-2000 the duty demand was to the extent of Rs. 6.84 crores. The Assistant Commissioner appropriated an amount of Rs. 4.40 crores from the ad-hoc cash deposit made by the assessee in the relevant period. For the balance amount of Rs. 2.34 crores, ignoring the cash securities furnished for the above mentioned period, an amount of Rs. 39.5 Lacs was appropriated from the cash securities/deposits made by the assessee for the period from October, 1996 to March, 2000. It is the case of the appellant that above action is totally unsustainable, while issuing the order dated 14-7-2000, finalising the provisional assessment for the period October, 1996 to March, 2000, the Assessing Authority did not raise any demand against the assessee. The operative portion of the order is as follows :-
"I order the provisional assessment for the period October, 1996 to March, 2000 as final and allowed the deduction of Rs. 4,17,47,532/-. If the party have paid excess amount apart from above, they have liberty to file refund claim which will be dealt separately."
3. The learned counsel for the appellant would point out that when the provisional assessment was finalized and if excess amount had been paid by the assessee, there is no need for the assessee to file an application for refund. Apart from the above, it is submitted that the Assessing Authority should not have appropriated the cash securities given by the assessee for the subsequent period of assessment. In support of the above contention, the learned counsel placed reliance on a decision of Kerala High Court in Vijaya Oil Mills v. State of Kerala - [1980] 45 STC 463. It has been held therein that when there are more debts than one due from a debtor and he makes payment to the creditor it is open to the debtor to direct it to be appropriated towards a particular debt due from him and the creditor is bound to do that. This is a principle incorporated in Section 59 of the Indian Contract Act, 1872.
4. It is not the case of the Revenue before us that there was no sufficient cash securities offered by the assessee for the period October, 1980 to September, 1996 to cover the entire demand under order dated 19-4-2000. The order impugned would also show that the appeal of the assessee was not rejected on this ground. The Commissioner (Appeals) took the view that the provisional assessment for the period October, 1980 to March, 2000 was finalized by the Assistant Commissioner in two parts vide orders dated 19-4-2000 and 14-7-2000. Under Section 11 of the Central Excises Act, 1944, the Assessing Authority is empowered to deduct the amount payable under the order from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control. Therefore, it is immaterial whether appropriation is made from the securities offered for the relevant period covered by the order dated 19-4-2000 or for the period covered by the order dated 14-7-2000.
5. The view taken by the Commissioner (Appeals) was adopted by the learned Departmental Representative.
6. We find merit in the contention raised by the appellants. The assessee has furnished sufficient ad-hoc cash deposits/cash securities to cover its duty liability as finally decided under order dated 19-4-2000. Such securities were furnished during the period covered by the order dated 19-4-2000. While such securities were available with the department, there is no justification whatsoever to make appropriation from the securities made available for the subsequent period covered by the order dated 14-7-2000. Even though the order dated 14-7-2000, as such, is not in appeal before us, we are constrained to observe that the direction given therein to file refund claim is totally unwarranted in view of the provisions contained under Rule 9B of the Central Excise Rules, 1944. The above rule relates to the provisional assessment to duty. Sub-rule 5 reads as under :-
"When the duty leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty, provisionally assessed falls short of, or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be."
The above rule envisages an order of refund to follow finalisation of the provisional assessment without the assessee making a claim for refund. A direction, an contained in the order dated 14.7-2000 would only help in multiplicity of the proceedings which is not warranted by the statutory provisions. Apart from the fact that the assessee is put to the trouble of making an application for refund, it is an additional burden on the department also to process and follow up separate proceedings for refund.
7. We accept the contention raised by the assessee that the Assessing Authority would not have appropriated the securities given by the assessee for the period October, 96 to March, 2000 to satisfy the duty liability for the period from October, 1980 to September, 1996.
8. In the result, we set aside the order of the Commissioner (Appeals) dated 8-5-2002 to the extent it is impugned in this appeal and allow the appeal.