Denial of provisional assessment of goods as per RULE 7 Central excise rule 2002

PJ/Case Law /2016-17/3407

Case- CASTROL INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Citation - 2016 (335) E.L.T. 169 (Tri. - Mumbai)

Brief Facts-The brief facts filtering out to unnecessary details are that the appellant sought for provisional assessment for the year 2009 by a letter dated 28-1-2009. The adjudicating authority by Order-in-Original dated 8-4-2009 rejected the request for provisional assessment only on the ground that the appellant-assessee had not cooperated with the authorities for finalizing the provisional assessment from the earlier period 1996 to 2008. Aggrieved by the said order, an appeal was filed before the first appellate authority. The first appellate authority also held the same view and rejected the appeal.

Appellant’s Contention-The appellant would submit that they have provided all the records for finalizing the provisional assessment from 1996 onwards to the authorities and the assessment are new being undertaken for finalizing the provisional assessment. It is his submission that the lower authorities were in error in interpreting the provisions of Rule 7 of the Central Excise Rules, 2002.

Respondent’s Contention-AR would reiterate the findings of the first appellate authority and also relies upon the judgment of the Hon’ble High Court of Calcutta in the case of Sachin Bhupendra Desai v. Union of India - 2009 (240)E.L.T.360 (Cal.) for the proposition that the provisional assessment and clearance on payment of duty is not an absolute right.

Reasoning Of Judgement- The Tribunal have considered the submissions made by both the sides. Tribunal find that both the lower authorities have mis-interpreted the provisions of Rule 7 of the Central Excise Rules, 2002. Firstly, the provision of Rule 7(1) (which is most relevant) is reproduced : -
where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him.
It can be seen from the above reproduced Rule that Legislature intent is very clear inasmuch as regards the provisional assessment is concerned, which is indicative that the Assistant Commissioner or the Dy. Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis. There cannot be any other view from the plain reading of the provisions as reproduced herein above. In the case in hand, rejection of request of provisional assessment only for (not providing the records to finalize assessment, cannot be a reason as the department in many cases have undertaken the exercise of finalizing the provisional assessment belatedly. Secondly, the reliance placed by the first appellate authority as well as the learned AR on the decision of the Hon’ble High Court of Calcutta is totally misplaced as the same is in respect of the provisions of Section 18 of the Customs Act, 1962 asking the provisional assessment of duty on direction of the proper officer. That is to say when an import takes place, assessee cannot claim provisional assessment as matter of right. While the Central Excise Act and the Rules made there under (the provisions of Rule 7) which are reproduced herein above, authorized the Assistant Commissioner or Dy. Commissioner of Central Excise to allow the clearance of the goods on provisional assessment

Decision- Appeal is allowed

Comment-The analogy of the case is that the rejection of request of provisional assessment only on the grounds of not providing the records to finalize assessment, cannot be a reason especially when department itself have undertaken the exercise of finalizing the provisional assessment belatedly. In the view of the above the impugned order is set aside and the appeal was allowed.
Prepared By– ARUNDHATI BAJPAI

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PJ/Case Law /2016-17/3407

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