2003 (7) TMI 217 - AT - Central Excise

Summary

Issues:
1. Alleged discrepancy in stock of goods leading to suspected shortage.
2. Debiting of amount under protest in personal ledger account.
3. Department's allegation of non-payment of duty and imposition of penalty.
4. Contention regarding provisional assessment and finalization of assessments.
5. Entitlement to take credit back suo motu.
6. Validity of notice issued under Section 11A of the Act.

Analysis:

1. The appellant, engaged in steel manufacturing, faced allegations of unexplained shortage of goods based on a stock verification by departmental authorities. Despite no formal notice, the appellant debited Rs. 30 lakhs in its ledger account under protest, prompting departmental action culminating in a show cause notice for alleged non-payment of duty.

2. The appellant argued that during the relevant period, goods were provisionally assessed, and final assessment precluded reopening. The department countered, stating the appellant's liability remained undetermined as the alleged short-levy issue was not finalized, challenging the appellant's right to take credit back suo motu.

3. Citing legal precedents, the Tribunal highlighted the necessity of issuing notices within specified periods from relevant dates, emphasizing the finality of provisional assessments upon duty adjustment. The premature notice issued to the appellant was deemed invalid, as final assessments had been concluded by the Assistant Commissioner.

4. Consequently, the Tribunal allowed the appeal, setting aside the Commissioner's order. However, it clarified that the department could pursue recovery if justified by law, based on investigations independent of provisional assessments, with the relevant date for issuing notices being the final duty adjustment date of 29-9-1999.