2002 (9) TMI 841 - AT - Central Excise

Summary

Issues Involved:
1. Provisional assessment validity.
2. Time-bar on duty demand.
3. Execution of bond for provisional assessment.
4. Classification of reclaimed rubber.
5. Applicability of Rule 9B of Central Excise Rules, 1944.
6. Application of precedents and judgments.

Analysis:

1. Provisional Assessment Validity:
The core issue is whether the Assistant Collector's order dated 7-2-1983, which provisionally approved the classification list of reclaimed rubber, was valid under Rule 9B of the Central Excise Rules, 1944. The Commissioner (Appeals) held that this order was beyond the purview of Rule 9B, which led to the dismissal of the duty demand on the grounds of time-bar. However, the Tribunal majority found that the Assistant Collector had the authority to order provisional assessment pending further inquiry, as indicated by the need for "completion of certain correspondence on the matter."

2. Time-Bar on Duty Demand:
The Commissioner (Appeals) set aside the duty demand of Rs. 23,89,103.74 for the period from 1-8-1982 to 4-11-1984 due to the absence of a valid provisional assessment. The Tribunal majority, however, concluded that the assessments were indeed provisional, thus making the demand enforceable and not time-barred under Section 11A of the Central Excise Act, 1944.

3. Execution of Bond for Provisional Assessment:
The respondents argued that the non-execution of the bond invalidated the provisional assessment. The Tribunal majority referenced the Supreme Court's decision in Samrat International Pvt. Ltd., which held that the non-execution of a bond does not invalidate provisional assessments if a personal ledger account is maintained with sufficient balance to cover potential duty liabilities.

4. Classification of Reclaimed Rubber:
The classification of reclaimed rubber was initially approved under Tariff Item 16A(2) with a 'NIL' rate of duty based on the Appellate Collector's order. However, subsequent reports and revised opinions led the Assistant Collector to reconsider and provisionally approve the classification under Tariff Item 68. The Tribunal majority upheld this reclassification, noting that new facts and revised chemical examiner reports justified the provisional assessment and reclassification.

5. Applicability of Rule 9B of Central Excise Rules, 1944:
Rule 9B allows provisional assessment when further inquiry is deemed necessary by the proper officer. The Tribunal majority found that the Assistant Collector's order for provisional assessment was valid under Rule 9B, as it was based on pending correspondence and further inquiry regarding the classification and eligibility for exemption under Notification No. 71/68.

6. Application of Precedents and Judgments:
The Commissioner (Appeals) relied on the decisions in Garware Plastics and Anchor Porcelain Works, which were distinguished by the Tribunal majority. The Tribunal majority emphasized that the Assistant Collector's order explicitly stated the need for further inquiry, aligning with the conditions under Rule 9B. Additionally, the judgments in Samrat International Pvt. Ltd. and Coastal Gases and Chemicals Pvt. Ltd. supported the validity of the provisional assessment despite the non-execution of a bond.

Conclusion:
The Tribunal majority allowed the Revenue's appeal, setting aside the Commissioner (Appeals)' order and confirming the validity of the provisional assessment. Consequently, the duty demand for the period in question was deemed enforceable and not time-barred.