2005 (5) TMI 361 - AT - Central Excise

Summary

Issues:
1. Absence of show cause notice in demand of differential duty in provisional assessment.

Analysis:
The judgment deals with an appeal by the Revenue against the order of the Commissioner of Central Excise (Appeals) accepting the respondent's argument regarding the absence of a show cause notice being fatal to the demand of differential duty. The tribunal noted that the case involved provisional assessment. The Commissioner (Appeals) had cited the Collector v. Kosan Metal Products case, emphasizing the necessity of issuing a demand for recovery under Section 11A of the Central Excise Rules rather than through a short entry on the monthly RT 12 return under Rule 173-I. However, the tribunal pointed out that the Kosan Metal Products case was not relevant in the context of provisional assessment. Instead, it referred to the Serai Kella Glass Works Pvt. Ltd. v. CCE, Patna case, where the Supreme Court held that for demands arising from finalization of assessment, no show cause notice under Section 11A was required. The tribunal concurred with this view, stating that if any short levy, non-levy, or erroneous refund is discovered post-final assessment, only then proceedings under Section 11A could be initiated following a show cause notice. Consequently, the tribunal ruled in favor of the Revenue, setting aside the impugned order and allowing the appeal.

This judgment clarifies the distinction between demands arising from provisional assessment and finalization of assessment. It underscores that for demands resulting from final assessment, a show cause notice under Section 11A is not mandatory, as per the Serai Kella Glass Works Pvt. Ltd. case. The tribunal's decision aligns with the Supreme Court's interpretation, emphasizing the procedural requirements for addressing deficiencies in duty assessment. By upholding the Revenue's contention, the tribunal ensures adherence to the prescribed rules and guidelines governing excise duty recovery, thereby maintaining legal clarity and consistency in such matters.