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TMI Blog2004 (6) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in writing and after considering their response thereto both in writing and on personal hearing. The revenue shall be at liberty to examine the issue of any short levy, non levy and consequent penal liability only after finalisation of the assessment as per law. We allow Appeals E/l793/96, E/1794/96 and E/3610/2000 as above. The Tribunal allowed the appeals filed by the assessees and dismissed the appeal filed by the Revenue, setting aside the show cause notices and the orders passed pursuant to them. The Jurisdictional Assistant Commissioner was directed to finalize the provisional assessments expeditiously, and the Revenue was allowed to examine any short levy, non-levy, and consequent penal liability only after the finalization of the assessments. - HON'BLE K.K. USHA, J. (PRESIDENT), S.S. KANG (J) AND C.N.B. NAIR (T), MEMBERS For the Appellant : Anil V. Dewan, Sushma Sharma, S. Chakravorty, Sonu Bhatnagar, R. Sashidharan and L. Maithili, Advs. For the Respondent : A. Subba Rao and Amar Jyoti Sharma, Advs. Order Justice K.K. Usha, President 1. In the above appeals at the instance of the assessees and Revenue common issues arise for consideration. We, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to inclusion of notional interest and security deposits received from wholesale dealers to the price. He then passed Order No. 8/99, dated 30-9-99 confirming a demand of Rs. 75.27 lakhs and directed the above amount to be adjusted against the sum of Rs. 1.10 crores already deposited by ITC in 1986 towards disputed excise duty. A penalty of Rs. 5 lakhs was also imposed under Rule 9(2). Thus, the Order No. 8/99 is as equal to Order No. 6/96, dated 13-9-96 which was already challenge in Appeal No. E/1793/96. If Order-in-Original No. 6/96 cannot be sustained then, as a consequence, Order No. 8/99, dated 30-9-99 should also fail. E/2760/2001 : 5. This appeal has been filed by ITC against Order No. 38/2000, dated 29-12-2000 passed by the Commissioner of Central Excise, Delhi. As mentioned earlier pursuant to the show cause notice dated 21-10-87 the Commissioner, Central Excise, Delhi had passed Order No. 5/96, dated 30-8-96 holding that after finalisation of the provisional assessment by the Assistant Commissioner, the Commissioner can proceed to adjudicate the show cause notice. The above Order No. 5/96 is already under challenge in Appeals E/1795, 1791 and 1792/96. As per the direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered is whether the contention raised by the assessees on the legality of the show cause notices issued during the pendency of the provisional assessments has to be accepted or not. It is also to be considered whether Commissioner of Central Excise, Delhi can retain with him the power to proceed with the show cause notice even after finalisation of the provisional assessments by the Jurisdictional Assistant Commissioner. In ITC Ltd. v. CCE, Delhi - 2002 (146) E.L.T. 336 South Zonal Bench, Chennai of this Tribunal has already spoken on these issues upholding the contention of the assessees. The learned Counsel for the appellant submitted that there are no reasons for us to take a different view. The learned DR on the other hand sought to support the orders impugned by the assessees. 10. In the appeal that come up for consideration before Chennai Bench the challenge was against Order No. 4/96, dated 12-8-96 passed by the Commissioner of Central Excise, Delhi pursuant to show cause notice dated 25-9-87 for the period 1-4-82 to 28-2-83. In the above order the Commissioner directed the Jurisdictional Assistant Commissioner to finalise the provisional assessment and to inform him o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voke the powers available under Rule 6 of the Central Excise Rules so that finalisation of provisional assessment itself could be done by either of these Commissioners. 12. It was contended on behalf of the assessee that the show cause notice was issued without authority of law and it was also premature. When the provisional assessment was pending finalisation under Rule 9(b) Revenue has no authority to issue a show cause notice demanding duty under Section 11A and proposing penal action. Reliance was placed on number of decisions of the Supreme Court, High Courts and the Tribunal in support of the above contention. (i) UOI v. Godrej Boyce Manufacturing Co. Pvt. Ltd. as in 1989 (44) E.L.T. 3 (Bom.) which was confirmed by the Supreme Court in SLP C. No. 12824/89 order dated 8-3-90. (ii) Serai Kella Glass Works Pvt. Ltd. v. CCE as in 1997 (91) E.L.T. 497 (S.C.). (iii) Nayek Paper Industries Pvt. Ltd. v. UOI as in 1991 (56) E.L.T. 31 (Cal.) (iv) Ponds (India) Ltd. v. AC, CE as in 1994 (73) E.L.T. 272 (Mad.) (v) Modi Rubber Ltd. v. CCE as in 1999 (108) E.L.T. 90 (T), and (vi) Tribunals Final order No. 386/93-A, dt. 29-7-93 in the case of CCE v. Ponds (India) Ltd. and Others in Appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be taken up after issuing a show cause notice. It was further clarified that where such a show cause notice is issued under Section 11A of the Central Excise Act after finalisation of the assessment the period of limitation will run from the date of adjustment of duty consequent to finalisation of assessment. Reliance was also placed on the decision of the Calcutta High Court in Nayek Paper Industries Pvt. Ltd. v. UOI where similar view was taken in respect of issue of show cause notice under Section 11A before finalization of assessment. It was held therein that no penalty can be divorced from the demand of duty on the ground of short levy or non levy due to suppression or any other wilful intention on the part of the noticee before finalization of the provisional assessment. Reliance was also placed on the decision of the High Court of Madras in Ponds (India) Ltd. v. ACCE and decision of this Tribunal in Modi Rubber Ltd. v. CCE. 16. Following the ratio of the above decision the Tribunal took the view that show cause notice dated 25-9-1987 has been issued prematurely and that it could not have been issued under law because it was not in dispute that the show cause notice had i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered view taken by the Chennai Bench. No other binding decision has been brought to our notice by the Revenue which would persuade us to take a different view. Therefore we have to consider the prayers in each appeal in the light of the ratio of the decision of Chennai Bench in ITC Ltd. v. CCE, Delhi. 19. As mentioned earlier challenge in Appeals E/1795, 1791 and 1792/96 at the instance of M/s. ITC, Master Tobacco and Crown Tobacco are directed against Order No. 5/96, dated 30-8-96. The above order was issued pursuant to show cause notice dated 21-10-87 covering the period 1-11-79 to 28-2-83. While the above-mentioned appeals were pending consideration before the Tribunal as per direction contained in Order No. 5/96 the Deputy Commissioner of Central Excise finalized the assessment for the period 1-11-79 to 28-2-83. Under order dated 22-9-2000 the Deputy Commissioner held that ITC had paid Rs. 83 lakhs in excess of the amount due to the department as Central Excise duty. Ignoring the above order the Commissioner of Central Excise, Delhi proceeded to adjudicate the show cause notice dated 21-10-87 in accordance with the direction contained in Order No. 5/96, and passed Order N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Central Excise, Delhi resumed adjudication of the show cause notice dated 10/11-8-83 and 8-10-84 relating to inclusion of notional interest and security deposit received from wholesale dealers to the price. He passed Order No. 8/99, dated 30-9-99 confirming a demand of Rs. 75.27 lakhs and directed the above amount to be adjusted against the sum of Rs. 1.10 crores already deposited by ITC in 1986 towards disputed excise duty. A penalty of Rs. 5 lakhs was also imposed under Rule 9(2). It can therefore be seen that Order No. 8/99 was passed in accordance with the direction contained in Order No. 6/96. Following the ratio of the decision of Chennai Bench we hold that show cause notices dated 10/11-8-83 and 8-10-84 proposing imposition of penalty also cannot be sustained as they were issued before provisional assessments were finalized. We also set aside Order No. 6/96 passed on the basis of the above-mentioned show cause notices. In the light of the above, we hold that Order No. 8/99 cannot be sustained as it was passed pursuant to the direction contained in Order No. 6/96. The Jurisdictional Assistant Commissioner will finalise the provisional assessment expeditiously. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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