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TMI Blog2024 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of duty payable as a consequence to such finalization. Since for the second time the Revenue has failed to adhere to the time frame to finalize the assessment, as mandated by the Tribunal, it is held that the confirmed demand is legally not sustainable. The Revenue failed to finalize the assessment within the normal period. Then Tribunal intervened and saved the Revenue by directing them to complete the de-novo proceedings within Four months. Thus, a lenient view was taken by the Tribunal, which in the normal course could have set aside the impugned order confirming the demand which was made without actual finalization of the assessment. This lenient view came with a caveat that the process of determination has to be completed within four months. Finally, the proceedings were completed in about 14 months, violating the time frame condition specified by the Tribunal. There is catena of judgments of Hon ble Supreme Court, High Courts where delayed adjudication of SCN without a reasonable cause has been considered as a ground for setting aside the Order passed pursuant to the said SCN. In the present case there was clear direction in 14.10.1986 Order of the Assistant Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals), the appellant took the stand the provisional assessment was not finalized since no action was taken subsequent to OIO dated 14.10.1986. The Commissioner (Appeals) vide Order-in-Appeal No. 01/2004 (H-I) CE dated 13.01.2004 rejected their appeal. Against this OIA, the appellant filed their appeal before the Tribunal. The Tribunal vide its Final Order No. 462/2007 dated 18.04.2007 held as under: 2. We have heard both the parties. There was dispute regarding the classification of Sodium Carboxy Methyl Cellulose (SCMC) between the department and the appellant. The matter was settled by the Hon ble Apex Court against the appellant. However, the Learned SR. Counsel who appeared on behalf of the appellants pointed out that the provisional assessments were never finalized at all. In spite of the fact that the provisional assessments were not finalized the Deputy Commissioner, Hyderabad-I Division in his letter dated 19.09.2000 directed the appellant to pay the amount due in instalments as directed and approved by BIFR. The Sr. Counsel took us through the records and invited our attention to Order-in-Original dated 14.10.1986 passed by the Asst. Collector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/15/27/2007-Adjn dated 04.04.2008 was issued seeking to know as to why the provisional assessment for the period 28.02.1982 to 27.02.1986 should not be finalised holding the product under TI 15(A) and differential duty of Rs. 1,05,72,593/- was demanded. After due process, the Adjudicating Authority confirmed the demand vide Order-in-Original No. 17/2008 dated 22.10.2008 confirming the entire demand of Rs. 1,05,72,593/-. Being aggrieved, the appellants filed their appeal before the Commissioner (Appeals), who vide Order-in-Appeal No. 15/19 (H-I) CE dated 27.02.2009 dismissed their appeal. Against this OI- A, the appellants filed the present appeal before the Tribunal. On an earlier occasion, this appeal had come up before this Bench on 23.10.2018, wherein, Order No. A/31389/2018 dated 23.10.2018 was passed ex-parte, without the presence of the appellant in the hearing, dismissing their appeal. Being aggrieved by this ex-parte order, the appellants approached the Hon ble High Court of Telangana. The Hon ble High Court vide their Order dated 03.11.2023 remanded the matter back to the Tribunal and directed the Tribunal to take up the matter on priority basis and conclude the same at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department, which was not done for the next more than 22 years. Therefore, even on this count, the confirmed demand is required to be set aside. 7. Learned AR appearing on behalf of the Respondent submits that in terms of Rule 9B of Central Excise Rules 1944, there was no necessity for the Department to issue separate show cause notice to recover the differential duty, once the assessment is finalized. Therefore, the stand taken by the appellant towards non-issue of the show cause notice under Section 11A within 6 months from the date of Order-in-Original dated 14.10.1986 is erroneous and cannot be taken into consideration. With reference to the issue of show cause notice dated 04.04.2008 issued on account of the Denovo proceedings taken up as per the directions of the Tribunal, he submits that the appellants was asked to appear on 20.08.2007 and 10.09.2007 and was also asked for various documents so as to complete the proceedings. The appellants did not co-operate with the Department which has resulted in the show cause notice being issued on 04.04.2008 and the Order-in-Original being passed on 22.10.2008. He submits that since the issue of classification of the product unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reason for the delay 11. The relevant portions of Rule 9B of CER 1944 are extracted below : 9B. Provisional assessment to duty :- (1) Notwithstanding anything contained in these rules,- (a) where the assessee is unable to determine the value of excisable goods in terms of section 4 of the Act on account of nonavailability of any document or information; or (b) where the assessee is unable to determine the correct classification of the goods while filing the declaration under rule 173B; the said assessee may request the proper officer in writing giving the reasons for provisional assessment to duty, and the proper officer may direct after such inquiry as he deems fit, that the duty leviable on such goods shall be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him , if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of difference between the amount of duty as provisionally assessed and as finally assessed: Provided that all clearances in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue was bound to finalize the assessment and issue the demand notice under Section 11A. However, it is on record that no such notice was issued. In the normal course, on this count itself the confirmed demand would get set aside. 14. On the other hand, it is noted that letter no. C No. I/10/11/87-Legal dated 19.09.2000 was issued by the Deputy Commissioner directing the appellant to pay the amount in instalments as directed and approved by BIFR. Here, demanding the amount without finalizing the assessment and issuing the letter which is not in conformity with Section 11A, renders this demand void ab initio. It is this demand, which itself is after more than one year from the date of order finalizing the classification issue, has been contested before the Commissioner (Appeals), who vide OIA No.01/04 dated 13.01.2004, dismissed the appeal filed by the appellant, without taking into consideration that the impugned letter was not a proper assessment finalizing document. This OIA was before the Tribunal for which the Final Order No. 462/2007 dated 18.04.2007, was passed. 15. The CESTAT s Order dated 18.04.2007 has to be interpreted in the context in which it was given. The Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were never finalized at all. In spite of the fact that the provisional assessments were not finalized the Deputy Commissioner, Hyderabad-I Division in his letter dated 19.09.2000 directed the appellant to pay the amount due in instalments as directed and approved by BIFR. The Sr. Counsel took us through the records and invited our attention to Order-in-Original dated 14.10.1986 passed by the Asst. Collector of Central Excise. The Order portion of the above mentioned Order-in-Original reads as follows: I confirm that the goods are rightly classifiable under tariff item No. 15-A upto 27.02.86. The provisional assessments made earlier under Rule 9-B are to be finalized accordingly. The differential duty consequently payable on the clearances made between 28.02.82 to 27.02.86 should be paid by the party within 10 days from the receipt of the demand under Section 11-A for the amount payable. A reading of the above order shows that the assessments have not been finalized and the party is expected to pay the differential duty on receipt of the demand under Section 11A. It was urged that the demand under Section 11A mentioned in the above order has not at all been issued. In other words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four months from the date of receipt of the Final Order. This order of the Tribunal itself goes on to show that the earlier confirmed demand on which the issue had reached the Tribunal, has no legal sanctity. The demand had to be made only after finalizing the assessment. For this entire process, the Tribunal had given time frame of Four months. Thus, for the Revenue which had not followed the required time-line on the previous occasion, it was of utmost importance for not to cross the time line this time. But it is seen that the Dept. has taken almost one year to issue the Show Cause Notice and another two months to finalize the assessment and pass the Order in Original No. 17/2008 dated 22.10.2008. 19. For such a huge delay, the Learned AR on behalf of the respondent submitted that only on account of the non-cooperation of the appellant the show cause notice was issued on 04.04.2008. Had they co-operated, no such delay would have taken place. We are unable to accept this argument because of the following facts: (a) The Commissioner (Appeals) in his Order-in-Appeal No. 01.04 dated 13.01.2004 has referred to the letter no. C No. I/10/11/87-Legal dated 19.09.2000 issued by the Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntervened and saved the Revenue by directing them to complete the de-novo proceedings within Four months. Thus, a lenient view was taken by the Tribunal, which in the normal course could have set aside the impugned order confirming the demand which was made without actual finalization of the assessment. This lenient view came with a caveat that the process of determination has to be completed within four months. Finally, the proceedings were completed in about 14 months, violating the time frame condition specified by the Tribunal. 24. While we have already held this to be fatal and allowed the appeal, this would also open up another possibility for this Bench. Since the direction of time frame was not followed, we are no more bound by the earlier lenience shown by the earlier Tribunal. 25. Therefore, as to whether the Revenue proceeded on an erroneous demand without proper finalization on the earlier occasion, becomes an open issue before the present Bench. We take the view that the Revenue had no case to delay in finalizing the assessment to issue the demand for the next 22 years. As observed earlier, it is a simple case of Classification dispute. We can understand that in the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er failing to appear and failing to file reply. If for seventeen long years no steps were taken, then, the justification given for reopening the proceedings was not accepted by this Court and in holding so once again the Division Bench reiterated the rule in the case of Government of India v. Citedal Fine Pharmaceuticals, Madras Ors. [AIR 1989 SC 1771 = 1989 (42) E.L.T. 515 (S.C.)] where the Hon ble Supreme Court was pleased to hold that in the absence of any period of limitation, it is settled law that every authority should exercise the power within a reasonable period. What would be the reasonable period would depend upon the facts of each case, no hard and fast rule can be laid down in this behalf. 27. To summarize: (a) The delayed finalization of the assessment taking 14 months to do so, as against the direction to finalise within 4 months period given by the Tribunal vide its Final Order No. 462/2007 dated 18.04.2007 is fatal to the present proceedings and we set aside the impugned order and hence we allow the appeal. (b) In view of the delayed finalization of assessment, against the express time frame given by the earlier Tribunal, the present Tribunal is not bound by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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