2017 (2) TMI 431 - AT - Central Excise

Refund claim - time bar - Section 11 B of the Central Excise Act, 1944 - in view of the new Rules w.e.f. 01.07.2001, the permission granted under the old Central Excise Rules, 1944 was no longer effective and thus the refund u/s 11 B of the Act, 1944 is time barred and thus rejected - Held that - under the provisions of section 38A (c) the provisional assessment permission granted under the Central Excise Rule 9B in the year 1989, remained valid and continuing upon enforcement of the new Central Excise Rules, 2002. Accordingly, I hold that the denial to finalize the assessment, not treating the same as provisional, is bad and against the provisions of law. There is no deliberate delay or latches on the part of the appellant-assessee, in approaching the Revenue for finalization of the assessment. Accordingly, I allow these appeals with directions to the concerned Assistant Commissioner to finalize the Provisional Assessment under the provisions of Rule 7 of Central Excise Rules, 2002 - appeal allowed by way of remand.

Summary

Issues:
Appeal against Orders-in-Appeal refusing finalization of Provisional Assessment and refund.

Analysis:
The appellant, M/s ITI Limited, filed appeals against Orders-in-Appeal passed by Commissioner (Appeals), Allahabad, denying finalization of Provisional Assessment and refund. The appellant had cleared products under provisional assessment to MTNL, who later finalized rates lower than the provisional prices. An application for finalization and refund was made, but a show cause notice (SCN) was issued citing time-bar under Section 11B of the Central Excise Act, 1944. The claim was rejected as time-barred, stating the old permission for provisional assessment was no longer valid under new rules effective from 01.07.2001. The appeal before the Ld. Commissioner (Appeals) was also dismissed, upholding the rejection.

The appellant's counsel argued that the prices on invoices indicated provisional rates subject to finalization with the customer. He contended that the permission for Provisional Assessment granted under the old Rules remained valid under Section 38A of the Central Excise Act, 1944. Referring to correspondence from the Chief Commissioner, it was highlighted that the rate finalization process usually took more than a year, justifying the delay in submitting details for finalization. The counsel urged that the provisional assessment should have been finalized, leading to the refund upon verification.

After hearing both parties, it was held that the permission for provisional assessment granted under Central Excise Rule 9B in 1989 remained valid under Section 38A (c) even after the enforcement of new Central Excise Rules in 2002. The denial to finalize the assessment was deemed against the law, and it was noted that there was no deliberate delay from the appellant's side in approaching Revenue for finalization. The appeals were allowed, directing the Assistant Commissioner to finalize the Provisional Assessment under Rule 7 of Central Excise Rules, 2002, and grant the refund with interest. The decision was made effective from three months after 07.11.2007, allowing the appeals by way of remand, entitling the appellant to consequential benefits as per law.