1991 (6) TMI 72 - HC - Central Excise

Summary

Issues Involved:
1. Validity of show cause notice.
2. Provisional assessment under Rule 9B.
3. Limitation period for demanding duty.
4. Jurisdiction of the proper officer.
5. Final assessment and recovery of duty.

Issue-wise Detailed Analysis:

1. Validity of Show Cause Notice:
The petitioner challenged the show cause notice dated 21-3-1988, which proposed to finalize the assessment for the period 10-12-1981 to 4-10-1985 and recover Central Excise Duty of Rs. 1,75,75,571.67. The petitioner argued that no provisional assessment under Rule 9B was made for the said period, rendering the notice without jurisdiction. The court concluded that the show cause notice was valid, as the classification lists were approved provisionally, and the duty was assessed provisionally under Rule 9B due to the interim order restraining the department from collecting the duty.

2. Provisional Assessment under Rule 9B:
The petitioner contended that the assessments on RT 12 returns were not provisional since no specific order under Rule 9B was made, and no bond was executed for differential duty. The court examined the endorsements on the classification lists and RT 12 returns, which indicated provisional approval and assessment. The court held that despite the lack of a formal order, the circumstances and endorsements suggested an incomplete assessment, which could be construed as provisional under Rule 9B.

3. Limitation Period for Demanding Duty:
The petitioner argued that the demand was barred by limitation as per the Supreme Court's ruling in Gokak Patel's case. The court noted that the interim order restrained the department from collecting duty, and the assessments were incomplete due to this restraint. Consequently, the court held that the limitation period did not apply, and the department could proceed with the final assessment and recovery.

4. Jurisdiction of the Proper Officer:
The petitioner argued that the provisional assessments were not made by the proper officer, as required under Rule 9B. The court referred to the definition of "proper officer" and concluded that the endorsements on RT 12 returns, made by the Superintendent, were valid. The court emphasized that the endorsements indicated provisional assessments, and the proper officer's involvement was implicit.

5. Final Assessment and Recovery of Duty:
The court examined whether the assessments for the relevant period were final or provisional. The endorsements on the classification lists and RT 12 returns indicated provisional assessments due to the interim order. The court concluded that the assessments were incomplete and not final. Therefore, the department was justified in issuing the show cause notice to complete the final assessment and recover the duty.

Conclusion:
The writ petition was dismissed, and the court upheld the validity of the show cause notice. The court allowed the department to complete the final assessment and recover the duty payable in accordance with law. The court emphasized that the endorsements on the classification lists and RT 12 returns indicated provisional assessments, and the limitation period did not bar the department's actions.