1995 (8) TMI 157 - AT - Central Excise

Summary

Issues:
Appeal against provisional assessment order; Legal basis for appeal at provisional assessment stage; Maintainability of appeal at provisional assessment stage; Rule 9B of Central Excise Rules; Order of provisional assessment; Show Cause Notice requirement for provisional assessment; Appeal against provisional assessment order; Principles of natural justice in provisional assessment.

Analysis:
The judgment involves nine appeals filed against the same Order-in-Appeal by the Collector of Central Excise (Appeals), Bombay. The appeals primarily revolve around the legal position of whether appeals are sustainable against provisional assessment orders issued by the Assistant Collector. The appellants had filed classification lists claiming benefits under Notification No. 1/93, which were provisionally approved by the Assistant Collector. The Collector (Appeals) dismissed the appeals stating that there was no legal basis for grievances at the provisional assessment stage and directed the Assistant Collector to finalize the classification lists within 30 days. The appeals were filed against this order (para 2).

The appellant's advocate argued that the provisional approval lacked specific reasons, exposing them to potential demands without clarity. The Collector (Appeals) had held that appeals against provisional assessment orders were not maintainable at that stage. The advocate referred to a previous decision stating that provisional assessment orders are appealable. The Tribunal found that Rule 9B empowers provisional assessment under specific circumstances and that orders of provisional assessment are appealable under Section 35 of the Central Excises and Salt Act, 1944 (para 3, 4).

While agreeing that provisional assessment orders are not final, the Tribunal noted that a Show Cause Notice is not mandatory for provisional assessment orders. However, the order should specify reasons, especially when passed by the Assistant Collector without a request from the assessee. The Tribunal emphasized that appellants should not be kept in the dark about the reasons for provisional assessment to prevent uncertainty. It was concluded that orders of provisional assessment can be appealed before the Collector (Appeals) (para 5).

The Tribunal disagreed with the advocate's view that every provisional assessment should be preceded by a Show Cause Notice and challenged on merits. Provisional assessment is considered an interim arrangement based on prima facie considerations and need not be challenged on merits unless it falls outside the parameters of Rule 9B. The Tribunal highlighted that principles of natural justice require a Show Cause Notice before final assessment, which can be appealed on merits. The order of final assessment is open for appeal, unlike provisional assessment orders (para 6).

The Tribunal found the order of provisional assessment defective as it lacked precise reasons for resorting to provisional assessment. The Assistant Collector was directed to provide specific reasons for provisional assessment and finalize the assessments promptly. Consequently, all nine appeals were disposed of accordingly (para 7, 8).