2005 (11) TMI 107 - AT - Central Excise

Summary

Issues:
1. Provisional assessment under Rule 9B of Central Excise Rules, 1944.
2. Applicability of duty demand and penalties on provisional assessments.
3. Appeal against the rejection of appeal by Commissioner (Appeals).
4. Interpretation of the proviso to Rule 9B regarding provisional assessment.

Analysis:
1. The appellant, a manufacturer of pipes and tubes, sought provisional assessment based on a price list submitted to the Central Excise authority. Subsequently, show cause notices were issued proposing duty recovery and penalties totaling about Rs. 1.4 crores. The Assistant Commissioner confirmed the duty demand and imposed penalties.

2. The appellant contended that under the proviso to Rule 9B, assessments subsequent to the filing of the price list were provisional, thus challenging the duty demand and penalties. The Tribunal noted that while provisions on short-levy recovery and penalties do not apply to provisional assessments, duty demands should be finalized based on Rule 9B. The appellant acknowledged the correctness of the duty amount demanded but contested the penalty imposition.

3. The appellant appealed the Commissioner (Appeals) rejection of their appeal. The Tribunal examined various decisions to determine the applicability of recovery provisions and penalties to provisional assessments. It was established that duty demands from provisional assessments should be finalized, with any differential duty payable by the assessee or returned by the department.

4. The Tribunal upheld the duty demand but set aside the penalty, as the duty amount confirmed in the proceedings was deemed correctly payable by the appellant. The judgment clarified that while duty demands from provisional assessments are valid, penalties may not be applicable, aligning with the interpretation of the proviso to Rule 9B regarding provisional assessments.