Department has no power to suo motto complete provisional assessment under Rule 7.

PJ/CASE LAW/2014-15/2294

Case:-CCE, PUNE-I Vs M/s KISHOR PUMPS LTD

Citation:-2014-TIOL-1047-CESTAT-MUM

Brief facts:-This appeal has been filed by the Revenue against Order-in-Appeal No. PUN-EXCUS-001-APP-124-13-14 dated 22.10.2013 passed by the Commissioner of Central Excise (Appeals), Pune I. Vide the impugned order, the lower appellate authority has set aside the order of provisional assessment No. P-1/Dn.III/CX.03/2012-13 dated 17.01.2013 passed by the Assistant Commissioner of Central Excise, Pune- III Division on the ground that Rule 7 of the Central Excise Rule, 2002 does not provide for order of provisional assessment by the department and the said Rule deals with only the provisional assessment at the request of the assessee. Aggrieved of the same, the Revenue is before Tribunal.

Appellant’s contentions:-The ld. Additional Commissioner (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum.

Respondent’s contentions:-None appeared for the respondent M/s Kishore Pumps.

Reasoning of judgment:-The Hon’ble Tribunal have perused Rules 7 of the Central Excise Rules, 2002. Sub-rule (1) of such Rules states that "where the assessee is unable to determine the value of the excisable goods or determine of the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him." If such permission is granted, the rule provides for execution of a Bond by the assessee with such surety or security as the said Assistant Commissioner may specify. The Rule further provides that where the provisional assessment has been sought, the Assistant Commissioner of Central Excise shall pass order for final assessment as soon as may be. The CBEC Manual also, in para 3.1 thereof, states that Rules 7 of the Central Excise Rule does not provide for the department, suo motu, issuing directions for resorting to provisional assessment. Therefore, when the Central Excise officers, during the scrutiny or otherwise, find that self-assessment is not in order, the assessee may be asked for all necessary documents, records or other information for issue duty demand for differential duty, if any, after conducting proper inquiry and in case the assessee fails to provide the records/information, ‘best judgment' method may be adopted to demand the duty. Thus, both the Rule and instructions issued thereon provides for assessment of duty finally in a case where assessee is unable to determine the correct amount of duty or correct rate of duty and also does not opt for provisional assessment.

In these circumstances, they do not find any infirmity in the order passed by the learned lower appellate authority. Accordingly, they dismiss the appeal filed by the Revenue as unsustainable in law.

Decision:-Appeal dismissed.

Comment:- The essence of the case is that Rule 7 of Central Excise Rules is applicable 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. This rule does not give option to department to apply the said Rule suo motto.

Prepared by: - Monika Tak

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PJ/CASE LAW/2014-15/2294

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