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2019 (12) TMI 474 - SC - Central ExciseValuation - captive consumption - provisional assessment - Order was not passed stated that it was a provisional assessment order - applicability of Section 11A of the Central Excise Act, 1944 - time limitation - Could the respondent authorities have ignored the binding directions of the Hon ble High Court of Delhi to hold that no Show Cause Notice (SCN) was required in the present case as the assessments in question were provisional? HELD THAT - The fact remains that the appellant voluntarily furnished requisite bonds in Form B-13 referable to Rule 9B supported by bank guarantee for equivalent amount of the differential duty. It is not an undertaking filed pursuant to the order of the Court. Concededly, the order disposing of the writ petitions does not absolve the appellant from the said bonds; nor the endorsements made thereon and on the monthly RT-12 returns, indicating that it was a provisional assessment have been ordered to be effaced. Suffice it to observe that the order dated 10/12.3.1993 passed by the High Court of Delhi, disposing of the writ petitions filed by the appellant in no way extricate the appellant from the process to which the appellant had voluntarily submitted itself at its own volition, namely, under Rule 9B of the Rules. Thus, it was not a case of duty not levied or not paid or shortlevied or shortpaid. The understanding of the parties was absolutely clear that the appellant was liable to pay excise duty, but for the exposition of the High Court of Delhi in J.K. Cotton Spinning Weaving Mills Co. Ltd. Ors. 1980 (10) TMI 71 - HIGH COURT OF DELHI . Understood thus, the appellant is obliged to fulfill its statutory obligations including those arising from the undertaking/bonds in Form B-13 and cannot resile from the process to which it had submitted itself without any demur, namely under Rule 9B of the Rules. Section 11A of the Act as applicable at the relevant time, would apply to cases of recovery of duties not levied or not paid or short levied or short paid etc. - The case at hand, however, would come within the dispensation predicated by Rule 9B of the Rules, which deals with provisional assessment to duty. The authorities have made endorsements on the bonds and on the monthly RT-12 returns filed by the assessee, indicating that it was a case of provisional assessment. Having submitted to that process, it is not open to the appellant to urge that an express order of provisional assessment has not been passed by the authorities. Whether circumstances for making provisional assessment existed in the present case? - HELD THAT - In the present case, admittedly there was a dispute pending before the Delhi High Court regarding the excisability of the yarn cleared for captive consumption. Pending final decision of the Delhi High Court, it was open to the appellant to seek and to the proper officer to allow clearance of yarn for captive consumption on provisional assessment basis. In fact, in the B-13 Bond it is recorded that the appellant had sought provisional assessment. Even if the contention of the appellant that the B-13 Bond was executed at the instance of the excise authorities, is accepted, in view of the fact that a dispute was pending before the Delhi High Court, it was open to the proper officer to insist on clearing the yarn for captive consumption on provisional assessment basis. Whether a provisional assessment order was in fact made before clearance of yarn for captive consumption on provisional assessment basis? - HELD THAT - It is not in dispute that during the period from May, 1981 to May, 1984 the appellant had cleared the yarn for captive consumption by executing B-13 Bond which is applicable to provisionally assessed goods. It is pertinent to note that the Delhi High Court by its interim order had not directed the appellant to execute B-13 Bond. Apart from B-13 Bond, there are various types of Bonds specified in Appendix I to the 1944 Rules, which could be executed by the appellant. The fact that the appellant claims to have executed the B-13 Bond at the instance of the revenue clearly shows that as per the directions given by the proper officer, the clearances have been effected on provisional assessment basis by executing B-13 Bond - It is not the case of the appellant that B-13 bond was executed inadvertently or by mistake. Therefore, having consciously cleared the yarn for captive consumption on provisional assessment basis by executing B-13 Bond as directed by the excise authorities, it is not open to the appellant to contend that there was no order/directions to clear the yarn on provisional assessment basis. The appellant cannot be allowed to approbate and reprobate for inviting the High Court of Delhi to pass interim order stipulating that the appellant would execute bonds in Form B-13 referable to Rule 9B of the Rules and continue to file monthly RT-12 returns from time to time, on which endorsements have been made indicating that it is a case of provisional assessment. The appellant cannot now be permitted to urge that it had not submitted to the process of provisional assessment as such for lack of a specific order of the concerned authority in that behalf. Appeal dismissed.
Issues Involved:
1. Whether the demand for Central Excise for the period 25.05.1981 to 14.05.1985 is barred by limitation. 2. Whether the respondent authorities could ignore the binding directions of the High Court of Delhi to hold that no Show Cause Notice (SCN) was required as the assessments were provisional. Detailed Analysis: Issue 1: Limitation of Demand for Central Excise Duty The appellant argued that the demand for Central Excise duty was barred by limitation. This argument hinged on whether the assessment in question could be considered provisional. The appellant contended that no formal order for provisional assessment was passed, and thus, the demand should be under Section 11A of the Central Excise Act, 1944, which imposes a limitation period. However, the judgment clarified that the appellant had voluntarily executed bonds in Form B-13 referable to Rule 9B of the Central Excise Rules, 1944, and the monthly RT-12 returns were endorsed as provisional assessments. This voluntary submission to the provisional assessment process meant that the appellant could not later claim that the assessments were not provisional due to the absence of a formal order. The court emphasized that the execution of Form B-13 bonds and the endorsements on RT-12 returns were sufficient to establish that the assessments were provisional. The court also referred to Rule 9B, which allows for provisional assessment when the proper officer deems it necessary to make further inquiries. Given that the appellant had sought interim relief from the High Court of Delhi and provided bonds and bank guarantees, it was clear that the assessments were provisional. Therefore, the demand was not barred by limitation as it did not fall under the purview of Section 11A, which applies to final assessments. Issue 2: Compliance with High Court Directions The appellant argued that the authorities ignored the binding directions of the High Court of Delhi, which purportedly required the issuance of a Show Cause Notice under Section 11A of the Act. The appellant relied on the decision in Rohit Mills Ltd. and other judgments to support this claim. The court, however, clarified that the High Court of Delhi's order dated 10/12.3.1993 did not absolve the appellant from the obligations arising from the bonds executed in Form B-13 and the provisional assessments. The order only stated that if a Show Cause Notice was required, it should be issued, and the appellant could respond to it. Since the assessments were provisional, the requirement of a Show Cause Notice under Section 11A did not arise. The court also referred to the decision of the Division Bench of the High Court of Judicature at Bombay in The Jam Shri Ranjitsinghji case, which dealt with a similar situation. The Bombay High Court had concluded that in cases of provisional assessment, the issuance of a Show Cause Notice under Section 11A was not necessary. This decision was upheld by the Supreme Court when the Civil Appeal was summarily dismissed. The court further noted that the appellant had voluntarily submitted to the provisional assessment process by executing bonds and filing monthly RT-12 returns with endorsements indicating provisional assessments. The appellant could not now claim that a formal order of provisional assessment was required. Conclusion The appeal was dismissed, and the court held that the demand for Central Excise duty was not barred by limitation as the assessments were provisional. The authorities did not violate any directions of the High Court of Delhi and acted in accordance with the law. The appellant's arguments were found to be without merit, and the court emphasized that the appellant could not approbate and reprobate by first seeking interim relief and then challenging the provisional assessment process.
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