2008 (6) TMI 75 - AT - Central Excise

Finalization of provisional assessment - Whether it was mandatory for the department to issue SCN to the assessee - assessee s contention that, whether the assessment be provisional or otherwise, a SCN is mandatory is well-founded - If that be the case, the question whether the relevant assessments were provisional or not could also to be considered by the original authority in adjudication of the SCN to be issued in this case - case is remanded to the original authority

Summary

Issues:
1. Stay application seeking stay of operation of the impugned order.
2. Demand of duty from the appellants for finalization of provisional assessments.
3. Dismissal of the assessee's appeal by the appellate authority.
4. Appeal filed by the assessee against the order passed by the appellate authority.
5. Consideration of substantive issues and case law by the lower appellate authority.
6. Requirement of issuing a show-cause notice (SCN) by the department.
7. Finalization of provisional assessment without the issuance of an SCN.
8. Mandate for the department to issue an SCN to the assessee.
9. Remanding the case to the original authority for fresh adjudication.

Analysis:
1. The Appellate Tribunal CESTAT, CHENNAI, consisting of Members P.G. Chacko and P. Karthikeyan, considered a case where the appellants sought a stay of the impugned order demanding duty of Rs. 28,09,480. The tribunal decided to dismiss the stay application and proceed to finally dispose of the appeal due to the issue being concise.

2. The original authority demanded duty from the appellants for finalizing provisional assessments without issuing the requisite order under rule 9B of the Central Excise Rules, 1944. The tribunal set aside the appellate Commissioner's order and remanded the matter for fresh adjudication, emphasizing the necessity of following proper procedures.

3. The appellate authority initially dismissed the assessee's appeal for non-compliance with Section 35F of the Central Excise Act. However, upon appeal to the Tribunal, the order was set aside, highlighting procedural lapses in the original authority's actions.

4. The Revenue's appeal seeking an enhancement of duty from the assessee was considered by the lower appellate authority along with the remanded matter, leading to the filing of the present appeal by the assessee against the impugned order.

5. The counsel representing the assessee argued that substantive issues and relevant case law were not adequately considered by the lower appellate authority, asserting that the assessments were not provisional and necessitated the issuance of a show-cause notice.

6. The fundamental question revolved around whether the department was obligated to issue a show-cause notice to the assessee. The tribunal agreed with the assessee's contention that the issuance of an SCN was mandatory, directing the department to do so and remanding the case to the original authority for a fresh adjudication.

7. Emphasizing the importance of following legal procedures, the tribunal set aside the orders of both authorities and instructed the original authority to consider all raised issues and case law, passing a fresh order within three months from the date of receipt of the tribunal's order.

8. The decision allowed the appeal by way of remand, ensuring that proper procedures and legal principles were adhered to in the adjudication process, providing the assessee with a fair opportunity to present their case.