2014 (7) TMI 480 - AT - Central Excise

Provisional assessment - Commissioner set aside the order of provisional assessment on the ground that Rule 7 of the Central Excise Rule, 2002 does not provide for order of provisional assessment by the department and the said Rule deals with only the provisional assessment at the request of the assessee - Held that - both the Rule and instructions issued thereon provides for assessment of duty finally in a case where assessee is unable to determine the correct amount of duty or correct rate of duty and also does not opt for provisional assessment. - Decided against Revenue. When the Central Excise officers, during the scrutiny or otherwise, find that self-assessment is not in order, the assessee may be asked for all necessary documents, records or other information for issue duty demand for differential duty, if any, after conducting proper inquiry and in case the assessee fails to provide the records/information, best judgment method may be adopted to demand the duty. Thus, both the Rule and instructions issued thereon provides for assessment of duty finally in a case where assessee is unable to determine the correct amount of duty or correct rate of duty and also does not opt for provisional assessment - Decided against Revenue.

Summary

Issues:
1. Provisional assessment under Rule 7 of the Central Excise Rule, 2002.

Analysis:
The judgment pertains to an appeal filed by the Revenue against an Order-in-Appeal dated 22.10.2013, where the lower appellate authority set aside the order of provisional assessment passed by the Assistant Commissioner of Central Excise. The crux of the matter was the interpretation of Rule 7 of the Central Excise Rule, 2002, which deals with provisional assessment. The Revenue contended that the department could also order provisional assessment, while the lower appellate authority held that the rule only allows provisional assessment at the request of the assessee. The Tribunal examined Rule 7, which permits an assessee to request the Assistant Commissioner for provisional assessment if unable to determine the value or rate of duty. The rule mandates the Assistant Commissioner to pass a final assessment order after provisional assessment. Additionally, the CBEC Manual clarifies that the rule does not empower the department to initiate provisional assessment suo motu. Instead, if self-assessment is found incorrect, the department can demand duty based on proper inquiry or resort to 'best judgment' method if the assessee fails to provide necessary information.

The Tribunal found no fault in the lower appellate authority's decision, as both Rule 7 and the CBEC Manual clearly outline the procedure for final assessment when an assessee cannot determine the correct duty amount or rate and does not opt for provisional assessment. Therefore, the appeal by the Revenue was dismissed as unsustainable in law. The judgment underscores the importance of adherence to statutory provisions and established procedures in matters of excise duty assessment, ensuring clarity and fairness in the assessment process for both the department and the assessee.