1991 (12) TMI 141 - AT - Central Excise

Summary

Issues Involved:
1. Classification of goods under the Central Excise Tariff.
2. Provisional vs. final assessment of duty.
3. Issuance of show cause notice under Section 11A of the Central Excise Act, 1944.
4. Limitation period for raising demand for differential duty.

Detailed Analysis:

1. Classification of Goods:
The primary issue revolves around the classification of goods manufactured by the Respondents, which include Roller Tappet Body, Closing Plug, Core Pole, Pole Piece, Rod Push, Nozzle Body Blanks, and Bearing Cup Forgings. Initially, these goods were classified under sub-heading No. 7208.00 attracting duty at Rs. 365/- per MT. However, the Respondents later filed revised classification lists classifying the items under sub-heading No. 7308.90 attracting duty at 15% ad valorem. The Assistant Collector of Central Excise reclassified these goods under sub-heading No. 8708.00, chargeable to duty at 20% ad valorem, as parts of motor vehicles.

2. Provisional vs. Final Assessment of Duty:
The contention was whether the clearances made by the Respondents were on a provisional basis pending the finalization of the classification list. The Respondents argued that since they were not required to execute a bond as per Rule 9B, the clearances should be considered final. However, the Tribunal observed that the classification list had not been approved, and the clearances were made on a provisional basis under Rule 173CC, which allows for the removal of goods on payment of duty based on the declared classification list.

3. Issuance of Show Cause Notice under Section 11A:
The Collector of Central Excise (Appeals) had set aside the demand for differential duty on the grounds that no show cause notice was issued under Section 11A of the Central Excise Act, 1944. The Tribunal, however, held that the demand raised by the Superintendent was in order as the clearances were provisional, and the classification dispute was settled only by the Assistant Collector's order dated 2/6-5-1988.

4. Limitation Period for Raising Demand for Differential Duty:
The Respondents argued that the demand for differential duty was beyond the limitation period since the clearances should be considered final. The Tribunal disagreed, stating that the duty paid was provisional, and the limitation period did not apply as the classification list had not been finalized. The Tribunal cited the case of Premier Automobiles Ltd. v. Union of India, where it was held that assessments could be considered provisional if there was an ongoing dispute known to both parties.

Conclusion:
The Tribunal concluded that the clearances made by the Respondents were provisional, and the demand for differential duty was valid. The orders of the lower appellate authority were set aside, and the appeals of the Revenue were allowed. The Tribunal emphasized that the classification and price list are determining factors for the assessment of goods, and pending finalization, the duty paid is deemed provisional under Rule 173CC. The non-execution of a bond does not alter the provisional nature of the assessment.