2008 (3) TMI 257 - AT - Central Excise

Denial of provisional assessment facility on ground that the appellants did not follow the procedure prescribed in Rule 9B and there was no Bond and Bank Guarantee - when the appellant filed the RT-12 returns, it was indicated therein that the assessment was provisional. In spite of this fact, the lower authorities have denied provisional assessment - denial of provisional assessment is not justified - when initial price is subject to variation, Revenue is bound to order provisional assessment

Summary

Issues:
Provisional assessment under Rule 9B of Central Excise Rules, 1944.

Detailed Analysis:

Issue 1: Provisional Assessment Denial
The appeal was against the denial of provisional assessment under Rule 9B of the Central Excise Rules, 1944 by the lower authorities. The appellants, manufacturers of electric wires and cables, had been assessing underground telephone cables provisionally. However, the Range Superintendent raised concerns about the procedure not being followed, leading to a show cause notice for denial of provisional assessment. The Original Authority rejected the request for provisional assessment and imposed a penalty, advising the appellants to pay duty under protest. The Commissioner (A) upheld this decision, prompting the appeal to the Tribunal.

Issue 2: Arguments by Appellant
The appellant argued that as a Government of India undertaking supplying goods to the Department of Telecommunication, price variations were routine due to the contract's clauses. They contended that assessments were always provisional based on the fluctuating copper prices. Despite executing a bond previously and receiving a refund, subsequent denials were based on technicalities like the absence of a bond and bank guarantee, which the department insisted on as per Rule 9B.

Issue 3: Arguments by Revenue
The Revenue relied on previous tribunal decisions emphasizing the necessity of complying with Rule 9B requirements for provisional assessment. They cited cases where formal requests for provisional assessment were deemed crucial, opposing the appellant's arguments regarding routine price revisions and government company status.

Issue 4: Tribunal's Decision
After careful consideration, the Tribunal found the denial of provisional assessment unjustified, citing the fluctuating nature of initial prices and previous bond submissions by the appellants. They criticized the lower authorities' decision as based on technicalities and lacking merit. The Tribunal referenced the Supreme Court's decision in the Samrat case, highlighting that maintaining a Personal Ledger Account could negate the need for a bond under Rule 9B. They criticized the Revenue's shortsighted approach, emphasizing the potential revenue loss if provisional assessments were treated as final. Consequently, the Tribunal allowed the appeal, providing consequential relief to the appellants.

This detailed analysis of the judgment highlights the procedural, legal, and technical aspects surrounding the denial of provisional assessment under Rule 9B of the Central Excise Rules, 1944, showcasing the arguments presented by both parties and the Tribunal's rationale for overturning the lower authorities' decision.