2014 (5) TMI 296 - HC - Central Excise

Demand of duty - extended period of limitation - when and under what circumstances the excise authorities could keep the assessment provisional under the prevailing statutes, namely, Section 11A read with Rule 9B - whether the authorities could reopen an approved classification list through a non-appealable communication. - After the proceeding came to its finality and when the petitioner also started paying the duty from 4-11-1984, the Superintendent of Central Excise, Range-IIC has issued a show cause notice dated 15-3-1994 calling upon the petitioner to pay the duty from 3-8-1982 to 4-11-1984 and the same was confirmed - Held that - the respondent has not proved either before the issuance of the show cause notice dated 15-3-1994 or before this Court that they have complied with what was laid down by the Apex Court in paragraph 12 of the judgment in Metal Forgings v. Union of India 2002 (11) TMI 90 - SUPREME COURT OF INDIA It goes without saying that the respondents have not followed any of the conditions, hence, I fail to understand how the case of the petitioner was not considered while allowing the appeal made by the department. The show cause notice issued on 15-3-1994 was admittedly barred by time as provided under clause (1) of Rule 10 of the Rules, hence, the order impugned herein comes under the scrutiny of this Court. - the order quashed - Decided in favor of assessee.

Summary

Issues:
Challenge to impugned order by Customs, Excise and Gold (Control) Appellate Tribunal; Provisional assessment under Section 11A and Rule 9B; Compliance with Rule 9B conditions for demand; Time limitation for show cause notice.

Analysis:

Issue 1: Challenge to Impugned Order
The writ petition was filed to challenge the order passed by the Customs, Excise and Gold (Control) Appellate Tribunal. The petitioner sought to quash the order and restore the order of the Commissioner of Central Excise (Appeals) which held the demands of the department as time-barred.

Issue 2: Provisional Assessment under Section 11A and Rule 9B
The substantial question of law raised was regarding the excise authorities' ability to keep assessments provisional under Section 11A and Rule 9B. The petitioner contended that the authorities could not reopen an approved classification list through a non-appealable communication.

Issue 3: Compliance with Rule 9B Conditions for Demand
The petitioner argued that the respondent did not comply with the conditions under Rule 9B before issuing a show cause notice for payment of duty. The conditions included the existence of an order under Rule 9B, evidence of goods cleared on provisional basis, and payment of duty based on provisional classification.

Issue 4: Time Limitation for Show Cause Notice
The Court considered the time limitation for the show cause notice issued by the department. It was noted that the notice issued on 15-3-1994 was barred by time as per Rule 10 of the Rules, leading to the quashing of the impugned order.

The judgment highlighted the importance of compliance with procedural requirements under Rule 9B for demanding duty payment and emphasized the significance of time limitations for issuing show cause notices. The decision to quash the impugned order was based on the lack of adherence to these legal provisions, as clarified by previous judgments cited during the proceedings.