Sanjay Yadav, J. - The Department vide this appeal under Section 35G (1) of Central Excise Act, 1944 takes exception to final order No.A/58465/2017-EX[DB] dated 20.12.2017 passed by Customs, Excise & Service Tax Appellate Tribunal on the following substantial questions of law, as proposed by the appellant:

"a) Whether, the Honble Tribunal has committed error of law in permitting adjustment of duty liability against the duty excess-paid in the month, with the duty shortpaid in other months, when they were assessed duty under Rule 8 of Central Excise Rules, 2002, suo-motu

b) Whether, the assessee can adjust the duty excesspaid in the month with the duty short-paid in other months, when they were not opted for Provisional Assessment in terms of Rule 7 of Central Excise Rules, 2002:

c) Whether suo-motu adjustment of duty excesspaid in the months, with the duty short-paid in other months in permissible, if assessee have not produced any evidence before the authority to prove that, they have not passed on the burden to any body and borne incidence of duty themselves

d) Whether the principle of unjust-enrichment is applicable to the present case, under which the assessee allowed by the Tribunal to adjust the duty excess- paid in the month, with the duty short-paid in other months, suo-motu

2. The period in question is from 2007-2008 to 2013-2014. The issue pertains to entitlement of the assessee to adjustment between short paid duty and excess paid duty.

3. Being engaged inter-alia, in the manufacture of toilet soaps, soap noodles falling under Chapter 34 of the First Schedule to the Central Excise Tariff Act, 1985, assessee manufacturer sodium salt of fatty acid noodles (SSFA Noodles) of soaps of different flavours at its factory of Malanpur. It is an intermediate products for the manufacture of toilet soaps. Assessee clears SSFA Noodles to its sister concern located in tax exempted areas at Baddi (Himachal Pradesh) for its use in manufacture of toilet soaps, which are cleared without payment of duty by availing area based exemption.

4. During relevant period assessee cleared SSFA noodles on payment of duty by determining the value under Rule 8 of the Central Excise Valuation Rules, 2000 following Cost Accounting Standard-4 methodology, on monthly basis, i.e. on the basis of 110% of the cost of production. At the end of every financial year, the assessee was getting the cost of production determined for the entire financial year through a Cost Accountant and if there was any short fall/short payment of excise duty based on CAS-4, the same was duly paid. However, if it was found that the excess duty was paid, refund of such duty was not sought, but such differential duty was paid after adjusting the excess paid with the short period.

5. The department taking note of the fact that the assessee had cleared SSFA noodles on the price below the assessable value determined in term of Rule 8 of the Rules resulting in short payment of duty; formed an opinion that the determination of the cost of production was on monthly basis by taking budget concession cost which was denied by taking actual cost of raw material and packing material from the software based on Moving Average Price Method which was redundant in view of the guidelines issued by the CBEC vide Circular No.6921/08/2003-Cx.I dated 13.2.2003 which required assessee to determine the cost of production in terms of CAS-4 issued by ICAI for the purpose of Rule 8. As there was no provisional assessment, differential duty was demanded for various periods by disregarding the excess payments made by the assessee.

6. The show cause notices for various periods were issued which were originally adjudicated and the differential duty confirmed. However, in appeal the Tribunal remanded the matter for de novo decision. On remand fresh order were passed on 25.8.2016; whereby in respect of five show cause notices following decision was taken.

"ORDER

(A) In respect of show cause notice bearing V(34)15- 01/2010/Adj.-1/34916 dated 31.11.2011 adjudicated vide OIO No.15-16/Commr/CEX/IND/2013 dated 10.4.2014 and de novo by CESTAT vide Final Order No.A/52755/2014-EX/[DB] dated 7.7.2014.

(i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of Rs.4,38,90,457/- (Rs. Four Crore Thirty Eight Lakh Ninety Four Hundred Fifty Seven Only) under proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944 (No. Section 11A (4) of Central Excise Act, 1944;

(ii) I impose a penalty of Rs.4,38,90,457/- (Rs. Four Crore Thirty Eight Lakh Ninety Four Hundred Fifty Seven Only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002.

(iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA and erstwhile section 11AB of the Central Excise Act, 1944.

(B) In respect of show cause notice bearing V(34)15- 01/2013/Adj.-1/24221 adjudicated vide OIO No.61/Commr/CEX/IND/2014 dated 3.7.2014 and de novo by CESTAT vide Final Order No.A/50797/2015- EX/[DB] dated 9.2.2015.

(i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of Rs.70,95,623/- (Rs. Seventy Lacs Ninety Five Thousand Six Hundred Twenty Three only) proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944 (under Section 11A(4) of Central Excise Act, 1944);

(ii) I impose a penalty of Rs.70,95,623/- (Rs. Seventy Lacs Ninety Five Thousand Six Hundred Twenty Three only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002;

(iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA of the Central Excise Act, 1944.

C. In respect of show cause notice bearing C.No.V(34)15-01/2014/Adj.- 1/13470 dated 28.7.2014.

(i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of Rs.63,37,897/- (Rs. Sixty Three Lacs Thirty Seven Thousand Eight Hundred Ninety Seven only) under Section 11A (1) and proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944;

(ii) I also impose a penalty of Rs.63,37,897/- (Rs. Sixty Three Lacs Thirty Seven Thousand Eight Hundred Ninety Seven only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002.

(iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA of the Central Excise Act, 1944.

D. In respect of show cause notice bearing C.No.V(34)15-01/2015/Adj.- 1/2859 dated 19.03.2015.

(i) I confirm the demand and order for recovery of Central Excise duty (including Cess) of Rs.1,50,53,136/- (Rs. One Crore Fifty Lakh Three Thousand One Hundred Thirty Six only) under Section 11A (4) and proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944;

(ii) I also impose a penalty of Rs.1,50,53,136/- (Rs. One Crore Fifty Lakh Three Thousand One Hundred Thirty Six only) upon the Noticee under Section 11AC of the Central Excise Act, 1944 read with Rule 25 (1) of the Central Excise Rules, 2002;

(iii) I order for recovery of interest at the prescribed rate on the on the duty confirmed under Section 11AA of the Central Excise Act, 1944.

E. In respect of show cause notice bearing C.No.IV(6)16/2010/Prev/31799, dated 14.12.2011.

I drop the proceedings initiated under the above show cause notice as infractous."

7. The Tribunal while relying on the decision in Jindal Steel & Power Ltd. Vs. Raipur-1,2016 342 ELT 253(Tri. Delhi) and Essar Steel India Ltd. Vs. CCE, Raipur, (2017) 345 ELT 139 reversed the order, holding:

"7. We have considered the submissions made by both sides. The goods have been cleared by the appellant to their own sister unit located in tax exempted areas. Consequently, the appellant is require to pay excise duty on goods so cleared. The basis of valuation is also required to be done in terms of Rule 8 of the Central Excise Valuation Rules, 2000 following the Cost Accountant Standards (CAS-4). It is not in dispute that valuation has been done properly as per CAS-4. However, such valuation has been done on the basis of CAS-4 certificate prepared on the basis of annual cost of production. The appellant has paid duty on a month to month basis on the basis of the cost of the goods for the previous month. When the valuation is finalised on an annual basis, there has been short payment of duty in some months as well as excess payment in other months. The appellant has already paid the excess duty wherever the value as per CAS-4 is more than the value adopted for payment of duty, but after adjusting the excess paid duty in other months. Such adjustment has not been permitted by the adjudicating authority even in the de novo adjudication.

8. We are of the view that the stand taken by the adjudicating authority is untenable. An identical issue has been considered by the Tribunal in the case of Essar Steel India (supra), in which the Tribunal observed as follows:

5. We have heard both the sides and perused appeal records including written submission. The admitted facts of the case are that there is no sale of iron ore concentrate by the appellant and clearance to sister suit for further use is subjected to excise duty and valuation for such duty has to be worked out in terms of Rule 8 of Valuation Rules, 2000. The central point of dispute is the frequency of periodicity of costing in terms of CAS-4. The appellants followed different value during the same financial year based on revision of costing within the year more than once. The Revenue contended that the costing should be annual basis and, hence, during whichever month the value happens to be less than the average annual cost, duty was confirmed.

6. First, we consider the appellants plea regarding the transaction value arrived at based on costing should be at the time of removal. It was submitted that the scheme of things for excise duty purposes in terms of Section 4 and Rules made thereunder and Central Excise Rules, the duty liability based on self- assessment has to be discharged at the time of removal of goods when the invoices are prepared. The legal position as submitted by the appellant cannot be contested. However, it is an admitted fact that the appellants themselves did not follow costing to arrive at deemed transaction value for each clearance. They have considered a period of many months and worked out the costing, in terms of CAS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance.

7. Now, the question remains when at the time of each clearance of excisable goods for captive consumption the exact transaction value could not be arrived at the relevant time the duty has to be paid on a provisional basis and upon arriving at the costing applying CAS-4 and the assessable value in terms of Rule 8 of Valuation Rules final determination of duty liability has to be made. In the present case, admittedly no provisional assessment was resorted to by the appellant. Hence, the determination of actual cost much later on the clearance resulted in certain adjustments and payments by the appellant.

8. The appellants referred to guidelines issued by the institute of Cost & Works Accountants of India on CAS-4. We have perused the same. Para 8 deals with periodicity of CAS-4 Certificates. The guidelines state that the frequency of revising the certificate of cost of production will depend upon the significance in the changes in the cost due to various factors like input cost fluctuations, changes in the employee cost and other expenses. It further notes that where goods are cleared on cost of production worked out as per the audited accounts of the previous audited period, it is advisable to prepare a fresh certificate of cost of production based on the audited accounts of the period for which the goods are cleared and the differential duty is paid or taken credit of as the case may be. In such circumstance, it is advisable to compute the actual material cost as per the issue valuation adopted by the assessee for material issues. Further, in the FAQ on CAS-4 the ICAI clarified that cost determination of a product is always for a period and computed on the basis of actual accounts of the company. The costs so determined should be actual cost reconciled with the audited accounts of the company after the accounts for the period is audited.

9. On perusal of the guidelines by the ICAI, we find while arriving at costing based on CAS-4 the correct method will be to determine the same based on actual audited data as per the accounting yer of the company. To that extent we find the CAS-4 cost price arrived at on annual basis by the Revenue is correct procedure.

10. The next issue for decision is on the quantification of differential duty. Even though there is no provisional assessment in the present case, the duty determination on the inter-unit transfer is made on annual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrive at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period has to be adjusted. The question of unjust enrichment has no relevance here. There is no refund considered here. The point that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to be considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable."

10. The appellant has claimed that they have already paid the short paid duty payable after deducting adjusting the excess. The adjudicating authority is directed to verify the same and recover only the differential , if any, after such adjustment."

8. Aggrieved department is in appeal.

9. It is urged that the assessee had determined the cost of production on monthly basis by taking budgeted conversion cost which was derived at by taking actual cost of raw material and packing material. Whereas, as per guidelines issued by CBEC vide Circular No.692/08/2003-CX-I dated 13.2.2003 he is required to determine the cost of production in terms of CAS-4 issued by ICA1 for the purpose of Rule 8, which rendered the monthly method of determination of cost of production redundant. It is urged that the practice adopted for payment of duty by the assessee of determining annual cost of production in terms of CAS-4 Certificate prepared at the end of year and then pay the differential excise duty after adjusting the excess payment of duty during rest of the month is contrary to provisions of Rule 8 of the Central Excise Rules, 2002. It is urged that there is no provision in Central Excise Act or Rules made thereunder which permits the assessee such adjustment of any excess duty paid during the month with the duty short paid in other months. It is urged that the exception is only where the assessments are provisional.

10. Thus the principle of Provisional Assessment as contained in Rule 7 of the Rules 2002 are being ushered in to find fault with the methodology the assessee had adopted for adjustment of excess payment of duty with the duty short paid in some months within same year, which in the present case in our considered, will not be attracted because the assessment has been final. In view whereof the decision by Full Bench of the Tribunal in Excel Rubber Ltd. Vs. Commissioner of Central Excise, (2011) 268 ELT 419 relied by the appellant is of no help to the Revenue because the same borders around Rule 7, which apparently is not attracted in the present case.

11. In the case at hand, the Tribunal has relied on its own decision in Essar Steel India Ltd. Vs. CCE, Raipur, (2017) 345 ELT 139, wherein while dwelling on the issue of quantification of duty, it is held:

"10. The appellant has claimed that they have already paid the short paid duty payable after deducting adjusting the excess. The adjudicating authority is directed to verify the same and recover only the differential , if any, after such adjustment."

12. The decisions relied by the appellant in M/s Mahindra Ungine Steel Co. Ltd. V/s CCE Pune, (2012) 278 ELT 215 (Tri. Mumbai) are of no assistance, because in these cases there was no evidence on record that the incidence of duty is not passed. In the present case it is an inter unit transfer of SSFA Noodles. Similarly in Krishna Electrical Industries Ltd. Vs. Commr. of C.Ex., Indore,2017 352 ELT 67 was not a case as the present one wherein the adjustment is made within same financial year.

13. In view whereof we are of the considered opinion that the substantial questions of law as proposed does not arise in the given facts of the case.

14. Consequently, appeal fails and is dismissed. No costs.