ORDER
S.S. Sekhon, Member (T)
1. Appellants are an assessee under the Central Excise Act, 1944 discharging duty on ad valorem basis. In the declaration filed under Rule 173C, they claimed deduction in respect of freight, transit insurance and taxes and submit that they cleared the goods on opting of provisional assessment as the exact quantum of declaration would be known only at the end of financial year. They also executed a Bond in form B-16 on 14.2.1996.
2. A notice of duty demand was issued for having failed to furnish the details of actual expenses of the deductions and disallowing the same for the period 1.9.1995 to 31.3.1996. Another notice dated 1.10.1996 was issued for the period 1.4.1996 to 31.8.1996.
3. The appellants based on Chartered Accountant’s certificate calculated differential duty for the period September, 1995 to March, 1996 and debited an amount of Rs. 94,073/- in RG23A Part II on 25.12.1996. The Assistant Commissioner however confirmed the demands at higher levels and imposed a penalty of Rs. 10,000/- as per notice dated 1.10.1996. The Commissioner (Appeals) remitted the matter for de novo adjudication. In the meantime, on the notice dated 4.2.1998, demands were confirmed and penalty of Rs. 20,000/- imposed by the Assistant Commissioner. This order was also remitted by Commissioner (Appeals) for de novo decision.
4. The Deputy Commissioner, vide Order dated 30.3.2001 confirmed a demand of Rs. 7,50,960/- and imposed a penalty of Rs. 75,000/- along with interest under Section 11AA. The Commissioner (Appeals) found:
“10. With a view to substantiate the aforesaid deductions claimed in their price declaration dated 17.08.1995, the Appellants have produced two certificates dated 24.12.96 and 22.4.1998 issued by the Chartered Accountant evidencing therein the expenses incurred by them during the relevant periods on account of various items in the following manner:-
Sl.No.
C.A.’s Certificate dated
24.12.1996 for the year 1995-96
C.A.’s Certificate dated
24.12.1996 for the year 1996-97
Item of
expense
Amount
In Rs
Item of
expense
Amount in
Rs
1.
Sales Tax
1.84
Sales Taxi
2.15
2.
Freight from factory to
depot
0.75
Freight from factory to
depot
0.67
3.
Freight from depots to
Customer’s premises
0.61
Freight from depots to
Customer’s premises
0.53
4.
Transit insurance
0.06
Transit insurance
–
5.
Bank charges
0.11
6.
Discounts
0.60
Total
3.97
Total
3.35
11. Out of the above deductions, the Adjudicating Authority has allowed the deductions @ Rs. 2.65 per FTL only during 95-96 and @ Rs. 2.82 per FTL only during the year 96-97. Rest of the deductions on account of reight from depot to Customers’ premises, discounts and bank charges etc. have been described to be irrelevant and as such not allowed. In other words, since the expenses on account of freight from Depot to customers’ premises, bank charges and discount were not shown specifically in the price declaration dated 17.8.95, the same could not have been be abated. The Appellants have given Ex-Branch sale price @ Rs. 28.50 per FTL and declared the assessable value under Section 4 as Rs. 20.44 after deducting Excise duty of Rs. 3.72 and expenses of Rs. 4.55 per FTL. As the discounts viz. freight from Depot to customers’ premises and bank charges were not claimed as part of the sale price in the price declaration dated 17.8.95 the Appellants were not entitled for these deductions. Further more the Appellants immediately after finalization of their accounts should have debited the differential duty involved.
12. Further, I find that it was not a case of provisional assessment. Merely because the Appellants have claimed to have furnished a B-16 bond with security, which was not even accepted by the proper officer, the assessments could not have been considered as provisional. It is also on record that the proper authority had not passed any order in writing under Rule 9B of the CER, 1944, stating therein the exact grounds on which the assessments were required to be made provisional. Thus, I do not find any substance in the appellants’ contentions that the assessments during the relevant period were provisional and they could have claimed the abatements from the said provisional selling price at the time of finalisation of the provisional assessments on the basis of the deductions duly certified by a Chartered Accountant. As the main ingredients of provisional assessment were absent the Appellants could not have been granted the benefit of those deductions which had not been claimed by them in their price declaration on 17.08.1995. The benefits of only those deductions, which had been declared in the price declaration and which were found substantiated with the documentary evidences alone, were admissible to the Appellants.
13. In view of the above I hold that the Adjudicating Authority has rightly disallowed the abatements on account of freight from depots to customers’ premises, bank charges and discounts from the Ex-Branch prices declared to the department. These deductions had not been claimed by them from the Ex-Branch Prices of their goods. Further, no evidence has been placed on record by the Appellants to show that these discounts/deductions were known to the buyers prior to the removal of the goods from the place of removal. Therefore, I agree with the Adjudicating Authority’s findings that the abatements on account of freight from depots to the customers’ premises, bank charges and discounts were not admissible to the Appellants. I, therefore, do not consider it appropriate to interfere with the impugned Orders. The subject appeal, filed by the Appellants, is accordingly rejected being not maintainable.”
5. Heard both sides and considered the materials and it is found:
(a) The appellants have taken a ground that the assessments were only provisional and a bond was executed and merely because the jurisdictional Commissioner did not pass a separate order under rule 9B, the assessment cannot be said to be not provisions. This ground cannot be upheld in view of the decision of the Supreme Court in the case of M/s Metal Forgings (2000 (146) ELT 241 (SC) (see para 12) wherein the Court has held that an order of provisional assessment is required and clearances made pursuant thereto could only be provisional assessment. Therefore the ground has no merits. The Commissioner’s finding on assessment not being provisional has to be upheld.
(b) The question of eligibility of claim is not in doubt It is only the quantum thereof which is under dispute. Since the assessments were not provisional as per the law laid down by the Supreme Court, the determination of quantum can be made only within the time period provided. The other grounds of the Assistant Commissioner not being competent to adjudicate are not gone into. The issue of competence of jurisdiction of the Assistant Commissioner to determine such matters has been referred to the concerned High Court vide this Tribunal order in the case of CCE, Jaipur v. Mangalam Cement Ltd 2001 (128) ELT 258). The order is therefore set aside and matter remitted back to CCE (Appeals), who should redetermine the issue of jurisdiction after the High Court’s decision on Reference is obtained. Needless to add that he would hear the appellant before he decides.
6. Appeal accordingly allowed as Remand to CCE (Appeals).
(Pronounced in Court on 5.2.2004)