Custom, Excise & Service Tax Tribunal
M/S. Tamilnadu Petro Products Ltd vs Cce, Chennai-I on 11 September, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/961/2006 & E/1001/2006
(Arising out of Order-in-Appeal Nos. 75 & 76/2006 and 10 11/2006 dated 24.08.2006 passed by the Commissioner of Central Excise (Appeals), Chennai)
M/s. Tamilnadu Petro products Ltd. : Appellant
Vs.
CCE, Chennai-I : Respondent
Appearance Ms. Vishnupriya, Advocate, for the Appellant Shri A. Cletus, ADC (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Date of Hearing / Decision: 11.09.2017 FINAL ORDER No. 42016-42017/2017 Per: B. Ravichandran Both the appeals are against the order dated 24/08/2006 of Commissioner (Appeals), Chennai.
2. The appellants are engaged in the manufacture of Linear Alkyl Benzene (LAB) using Kerosene as main raw material. They use imported as well as indigenous kerosene for the said purpose. For imported kerosene they have availed concessional rate of duty under Notification No. 26/1999-Cus. dated 28.02.1999. The said notification allowed concessional rate of 5% duty on 15% quantity of imported kerosene subject to the condition that the said 15% is used for extraction of paraffin. In case of lesser usage of the prescribed limit, the normal rate of duty shall be payable for the differential quantity. Since the consumption data has to be obtained later, the assessment was done provisionally. Later on the details furnished by the appellants, the original authority finalized the assessment by an order dated 26.07.2006. Later based on certain investigations conducted by the officers with the records of the appellants, Revenue initiated proceedings by issuing Show cause notices dated 13.05.2004 and 18.05.2004, to the effect that the concession claimed by the appellant with respect to the above notification is not properly worked out. The original authority has calculated the concession wrongly. The proceedings initiated by the notices sought to recover differential duty on re-calculation of the said 15% of quantity.
3. The Ld. Counsel contesting the findings of the lower authorities raised the legal objection regarding tenability of the proceedings initiated by these SCNs. It is submitted that the provisional assessment which was on the concession available to the appellant under the said notification was finalized based on the documents and calculations submitted by the appellants. The original authority finalized the provisional assessment in July 2000 itself. The present proceedings, re-opening the said assessment, initiated by the SCNs issued in May 2004 by is not legally tenable. It is further submitted that any order passed in finalization of provisional assessment is to be reviewed by the Commissioner, for an appeal. The period of limitation will apply. In the present case, almost after four years, the finalized assessments were sought to be reopened which is not tenable.
4. The Ld. AR strongly opposes the above legal contest as made by the appellant. He submitted that at the time of finalization of provisional assessment, the assessing officer proceeded with the documents and details submitted by the appellants. Later, upon detailed verification of the accounts of the appellant, it was revealed that the consumption data and various other particulars were not correctly given by the appellants. In fact, the particulars given were found to be incorrect and were based on certain estimates and not on actuals. When such being the case, the Revenue is well within its right to proceed against the appellants, for submission of wrong statements resulting in ineligible concession granted to them, at the time of finalization of assessment. Accordingly, he submitted that proceedings are legally valid.
5. We have heard both sides and perused the appeal records.
6. Admittedly, the assessment for imported kerosene were provisional. The provisional assessments are only on the ground that the concession available to the appellants is to be based on the quantification of kerosene used for extraction of paraffin. The appellant later submitted the data along with the Chartered Accountants Certificate. This was accepted by the assessing authority and the assessments were finalized in July 2000 by issuing a speaking order. The order for finalization of assessment is a quasi-judicial order. In such circumstances, we are not in agreement with the Revenue to the effect that the said assessment can be re-opened invoking provisions of suppression, willful misstatement etc., much later. The documents which were verified by the Revenue to make such allegations were very much available at the time of finalization of provisional assessment. The assessing authority did not cause any further verification and accepted simply the data provided by the appellants. The calculations made by the appellants to arrive at the quantum of concession were admittedly were now not accepted by the Revenue. The question remains that whether on the failure of the assessing authority in getting the full matter verified to his satisfaction before issuing final order, the Revenue can assert that the appellants deliberately mis-represented the facts to claim ineligible concession. The appellants did make certain submissions based on their estimated consumption. Apparently based on the documents on actual consumption, the percentage may vary. There is a mixed storage of indigenous as well as imported kerosene. The appellants followed accounting which is later found to be not acceptable to Revenue. The question is not about the correctness of the accounts. It is about verification to be done by the assessing authority before issuing speaking order on finalization of provisional assessment. The original authority had applied his mind and passed a speaking order. It is not open for starting a fresh proceeding without reviewing the said order for further appeal. The Tribunal in the case of Tribunal in MRF Ltd. 1017 (349) ELT 675 (Tri.-Chen.) dealing with belated demand after finalization of provisional assessment held that the officer conducting adjudication has applied his mind in good faith to law. If he fails to discharge his duty under law, having his own scope to call for entire details, it is difficult to appreciate Revenues case later belatedly for further recovery.
7. In view of the above discussions and analysis, we find that the present proceedings are not sustainable. Accordingly, the appeal is allowed on these grounds.
(Order dictated and pronounced in the open court)
(B. RAVICHANDRAN) (SULEKHA BEEVI C.S.)
Member (Technical) Member (Judicial)
BB
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