Custom, Excise & Service Tax Tribunal
M/S. Srf Ltd vs Cce, Trichy on 25 November, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/CO/6/04 and E/901/03
(Arising out of Order in Appeal No. 351/2003-(SCN) TRY-II dated 30.07.2003, passed by the Commissioner of Central Excise, (Appeals), Trichy).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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M/s. SRF Ltd. : Appellant
Vs.
CCE, Trichy : Respondent
Appearance Shri K.S. Venkatagiri, for the appellants Shri V.V. Hariharan, JCDR, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 25.11.2009 Date of pronouncement:
Final ORDER No._____________ Per: Dr. Chittaranjan Satapathy Heard both sides. The question to be decided in this case is whether the assessment for the impugned period from 01.03.86 to 28.02.87 can be held to be provisional or not, and consequently whether the demand of duty confirmed against the appellants is sustainable or not.
2. It is the case of the department that the appellants filed classification list in the year 1986, classifying the impugned goods under sub-heading 5905.20, which was approved provisionally as there was dispute regarding classification of the product. Accordingly, the relevant RT-12 returns were also assessed provisionally. The appellants letter dated 26.09.86 also clearly indicated that the assessment was provisional. The case of the appellants, on the other hand, is that the proper officer never issued an order under Rule 9B of the Central Excise Rules., 1944, directing provisional assessment and executing the necessary B-13 bond. The lower appellate authority has held that the assessment for the impugned period 01.03.1986 to 28.02.87 was provisional leading to this appeal.
3. While arguing the case before us, both sides have cited various case laws on the issue of provisional assessment. For convenience sake, we deal with these case laws below:-
1. Samrat International (P) Ltd. Vs. CCE 1992 (58) ELT 561 (S.C.) In this case, the Honble Supreme Court has held as under:-
9.This is the scheme for the payment of duty for clearance of goods by? the manufacturers. This procedure is known as self-removal procedure. There will be no time bar for refund if the duty is paid under protest. The period of 6 months is prescribed in other cases. As we have already seen, Section 11B says that the period of 6 months in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof. In this case, the classification list filed by the appellant for the period 1-4-1985 to 27-4-1985 was not approved till 3-6-1985. From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer. However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of the goods. In the present case between 1st April, 1985 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account. The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned. This is the procedure prescribed under Rule 9B except for the circumstance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time. In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment. In such a situation clause (e) of para (B) of the Explanation under Section 11B will be attracted. In this case the RT-12 Return for the month of April, 1985 was filed on 8-5-1985 and the same was assessed on 29-10-1985. It is, therefore, only from the date of this assessment that time-bar in Section 11B will operate. In the present case the refund application had been filed on the 30th of October, 1985. It cannot, therefore, said to be time barred.
2. Coastal Gases & Chemicals Pvt. Ltd. Vs. Asst. Collector 1997 (92) ELT 460 (S.C.) It has been held by the Honble Supreme Court in this case as follows:-
5. The appellants have relied upon a decision of this Court in Samrat International (P) Ltd. v. Collector of Central Excise, Hyderabad - 1992 (58) E.L.T. 561 (S.C.) = 1992 Suppl. (1) SCC 293 where this Court said limitation under Rule 11 commences only from the date of final assessment . On the facts of that case, however, this Court had held that the payment of duty which was made by the appellants in that case was provisional and the procedure under Rule 9B had been followed. We have not been shown any material on record to indicate whether the appellants in the present case had cleared carbon dioxide manufactured by them by following the procedure laid down in Rule 9B or that the payment of excise duty which the appellants had made during the relevant period was provisional. This is a matter which the appellants will have to establish before the departmental authorities when the matter goes back to the departmental authorities for considering the claim of the appellants for refund under the ratio of Mafatlal Industries case (supra). If the appellants succeed in establishing that the payment of duty which was made by them for the period in question was a provisional payment, they shall be entitled to the benefit of the ratio of the judgment of this Court in Samrat Internationals case (supra).
3. Rajiv Mardia Vs. CCE, Indore 2000 (118) ELT 627 (Tri. LB) In this case, the five member Bench of the Tribunal held that the decision of the Supreme Court in the case of Samrat (supra) applies even to cases of demand. It was further held that there should be material on record to show that procedure laid down in Rule 9B was followed for the purpose of showing that the assessments are provisional.
4. Rajiv Mardia Vs. CCE, Indore 2001 (129) ELT 334 (Tri. LB) In this case, a six member Bench of the Tribunal held as follows:-
6. We are clear in our mind that Samrat International Pvt. Ltd. envisages payment of duty on provisional basis pending decision of classification list or price list. For these payments to be treated as provisional, procedure contemplated by Rule 9B is not to be followed. Therefore, we are of the considered view that the observation made by the Larger Bench of five Members that there should be material on record to show that procedure laid down in Rule 9B was followed for the purpose of showing that the assessments are provisional, cannot hold good in the case of payments of duty effected pending finalization of classification list or price list.
5. Metal Forgings Vs. UOI 2002 (146) ELT 241 (S.C.) In this case, the Honble Supreme Court has held as follows:-
12.From the above, it is clear that to establish that the clearances were made on a provisional basis, there should be first of all an order under Rule 9B of the Rules, and then material to show that the goods were cleared on the basis of said provisional basis, and payment of duty was also made on the basis of said provisional classification. These facts in the instant case are missing, therefore, in our opinion there is no material in the instant case to establish the fact that either there was a provisional classification or there was an order made under Rule 9B empowering the clearance on the basis of such provisional classification. In the absence of the same, we cannot accept the argument of the Revenue that in fact the order of the Assistant Collector dated 21-1-1976 is a provisional order based on which clearance was made by the appellants or that they paid duty on that basis. On the contrary, as held by the Judicial Member the said order of classification was a final order, therefore, the Revenue cannot contend the limitation prescribed under Section 11A does not apply.
4. We find that in the case of Metal Forgings (supra), the Honble Supreme Court has taken note of its earliar decisions in the case of Samrat (supra) as well as that of Coastal Gases & Chemicals (supra). We particularly note that in this case, the Honble Supreme Court has held that there was no material to establish the fact that either there was a provisional classification or there was order made under Rule 9B empowering the clearance on the basis of such provisional classification.
5. In the light of the afore-cited decisions, we look at the facts of the present case and we find that the classification list filed by the appellants was provisionally approved. This is clear from the fact that the jurisdictional officer had verified the same and recommended to approve it provisionally. Subsequently, the jurisdictional Asst. Collector, had clearly indicated in the Memorandum of Appeal that the classification of the impugned goods is approved provisionally under Rule 9B of the Central Excise Rules, 1944, until further orders. We also find that the impugned RT12 returns indicated that the same were provisionally assessed. The returns for the month of April 1986 does not indicate the gate pass details but in our view, that makes no difference as there is as clear indication that the assessment was provisional. We also note the fact that other relevant RT12 returns indicate that all the gate passes are covered by the provisional assessment.
6. Moreover, the appellants themselves in their letter dated 26.09.86, have indicated that they were instructed by the jurisdictional range superintendent that no goods should be cleared on the basis of revised classification list till the approval of the same and that as instructed they have been continuing to clear the impugned goods under the provisionally approved classification list. They have also requested the department to kindly note that they are paying duty as directed under protest.
7. The factual details as enumerated above, leaves us in no doubt that there was a provisional classification and that the clearances and duty payment were done provisionally. Hence, this case, meets the test laid down under the Honble Supreme Court decision in the case of Metal Forgings (supra) which clearly held that either there should be a provisional classification or there should be an order under Rule 9B empowering the clearance on the basis of such provisional classification. Even the test laid down in Samrat (supra), Coastal Gases and Chemicals (supra) and six member decision in Mardia (supra) are also satisfied.
8. Hence, in our view, the assessments for the impugned period are required to be held as provisional and consequently, the demand confirmed against the appellants is required to be upheld as the Ld. Advocate appearing for the appellants is not disputing the duty rate at which the said amount has been quantified. We order accordingly.
10. The appeal is dismissed.
( Order pronounced in the open Court on )
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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