2015 (7) TMI 1197 - AT - Central Excise

Refund claim - Section 11B of the CEA, 1944 - denial on the ground that there was no order from the competent authority in allowing payment of duty on provisional basis and therefore, the value assessed is not provisional and is final - Held that - On perusal of Rule 9B of the erstwhile Rules and Rule 7 of the present Rules, it reveals that as far as the procedures are concerned, there is no change in the said Rules. In both the said Rules, there is no stipulation that provisional assessment can be resorted to by the assessee for a specified period. In absence of any specific stipulation/ prohibition prescribing for the time limit for which the provisional assessment shall be valid, the order dated 7.7.1989 allowing the provisional assessment by the Jurisdictional Central Excise Authorities will hold good for the disputed period, even if, the said period is governed under Rule 7 of the Central Excise Rules, 2002. Though the final price of goods has been settled between the appellant and its buyers, but in absence of acceptance of such final price by the Central Excise Authorities u/r 7 of the CEA, the refund application filed by the appellant is pre-mature. Thus, rejection of refund application on the ground that no permission has been granted for resorting to provisional assessment or the same is barred by limitation of time is not sustainable under the law. The refund application can only be filed upon finalization of assessment, which has not yet been done. Hence, after setting aside the impugned order, the matter is remanded back to the Original Authority for finalization of the provisional assessment and for passing necessary/ appropriate orders to that effect - appeal allowed by way of remand.

Summary

Issues:
Refund application rejection based on absence of order for provisional assessment and limitation under Section 11B of Central Excise Act, 1944.

Analysis:
The appellant, engaged in manufacturing Tele Communication equipment, filed refund applications under Section 11B of the Central Excise Act, 1944, which were rejected due to absence of an order for provisional assessment by the competent authority. The rejection was also on grounds of limitation under Section 11B. The Commissioner (Appeals) upheld the rejection, leading to an appeal before the Tribunal.

The appellant opted for provisional assessment under Rule 9B of the Central Excise Rules, 1944, which was accepted by the Jurisdictional Central Excise Authorities. However, with subsequent rule changes, the appellant requested permission to continue provisional assessment under the new rules, but the request remained pending. The final prices of goods sold were less than the provisional prices on which duty was paid, leading to the refund claim rejection.

The Tribunal observed that there was no time limit specified for provisional assessment validity in both old and new rules. The appellant's request to continue provisional assessment under the new rules was pending, and the final price had not been accepted by the Central Excise Authorities. Therefore, the rejection of the refund application was deemed premature, and the impugned order was set aside.

The Tribunal remanded the matter to the Original Authority for finalizing the provisional assessment and issuing necessary orders. If the finally assessed price is lower than the provisional price, the appellant can file a refund claim, which should not be considered time-barred. The Original Authority was directed to provide a personal hearing before finalizing the assessment.

In conclusion, the Tribunal set aside the impugned order, allowing the appellant to file a refund application post finalization of assessment. The matter was remanded for appropriate finalization of provisional assessment and refund consideration if necessary, with due opportunity for a personal hearing.