Customs, Excise and Gold Tribunal - Delhi
Shri Rajeev Mardia And M/S. Mardia Steel ... vs Commissioner Of Central Excise, Indore on 14 March, 2001
Equivalent citations: 2001(75)ECC221, 2001(129)ELT334(TRI-DEL)
ORDER
K. Sreedharan, J
1. Following question was referred to a larger Bench for consideration:-
"In Samrat International Pvt. Ltd. vs. Collector of Central Exercise [1992 (58) ELT 561], Supreme Court was dealing with a case where a classification list was filed by the manufacturer but as not approved for a long period. During the interregnum, how the payment of duty has to be dealt with, was considered by their Lordships. It was taken that the amount of duty paid was obviously provisional and subject to the result of the final approval by the authorities concerned. Their Lordship took the view that "clearance of the goods made by the appellant between the date of filing the classification lists and the date of approval by the Departmental authorities were in accordance with the procedure for provisional assessment. Consequently, it was observed that in such a situation, provisions contained in Section 11B of the Act apply, where a claim for refund of the excess amount o duty is made by the manufacturer. The observation of their Lordships that a clearance between the date of filing the classification list and approval of the same by the authority must be presumed to be provisional was according to the appellants herein limited to case of refund and not to payment of duty. This view according to learned counsel is highlighted by this Tribunal in Universal Paper Mills Ltd.vs. Collector of Central Exercise, Calcutta [1997 (20) RLT 285 (CEGAT-EZB) ], M/s. Aloke Udyog Vanaspati & Plywood Ltd. vs. Commissioner of Central Excise,Calcutta-1 [1998 (25) RLT 59 (CEGAT) & Commissioner of Central Excise, Jamshedpur vs. Jardine Honderson Ltd. [ 1999 (114) ELT 650 (T). In this situation, we feel that the issue has to be dealt with by a Larger Bench of this Tribunal. Accordingly, it is referred to a Larger Bench."
A Bench of five Members of this Tribunal answered the above question in the following terms:-
"In view of our findings herein above, we hold that the view taken in Universal Paper Mills Ltd. that Samrat decision of the Hon'ble Supreme Court confined to cases of refund is not correct and the Samrat decision applies even to cases of demand. We hold, following the Supreme Court judgment in Coastal Gases and Chemicals 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."
After giving the above answer, the larger Bench directed the appeal to be posted before regular Bench for decision on merits. Consequently, the appeal came up before a Bench of two Members. The said Bench doubted the correctness of the statement made by the larger Bench, namely, that procedure laid down in Rule 9B should be followed for the purpose of showing that the assessments are provisional. According to that Bench, the above opinion on the provisional nature of the assessment requires reconsideration in view of the Apex Court's decision. Consequently, the matter was referred to still larger Bench. Thus, the issue has come up before this Bench consisting of six Members of this Tribunal.
2. The only issue, which requires to be considered by us in this matter, is whether the decision of the Supreme Court in Samrat International (P) Ltd. vs. Collector of Central Excise reported in 1992 (58) ELT 561 envisages clearance of goods on provisional assessment dehors the provisions contained in Rule 9B of the Central Excise Rules, 1944.
3. Rule 9B of the Rules lays down procedure for making provisional assessment to duty. If the provisions contained in this Rule are complied with, the payment of duty can certainly be provisional. Duty paid on compliance with the entire provisions contained in Rule 9B will be payment on provisional basis stricto sensu.
4. In Samrat International (P) Ltd. vs Collector of Central Excise, 1992 (58) ELT 561 (SC), the assessee was clearing the goods between 1st April, 1985 to 3rd June, 1985 by determining the duty himself and debiting the amount of duty in his personal ledger account while the classification list was pending approval by the concerned authority. During the said period it was the admitted case of parties that the procedure contemplated by Rule 9B of the Rules was not followed. In such a situation, their Lordships of the Supreme Court observed:
"The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned." (emphasis added) During the said period from 1st April to 3rd June, 1985, assessee removed the goods on payment of duty determined by himself. Such clearance and payment of duty has been held by their Lordships as provisional. Consequently, their Lordships went on to state that the clearance of goods made during the period must be taken as having been made in accordance with the procedure for provisional assessment. In other words, even if the procedure contemplated by Rule 9B is not complied with, it will be deemed that the payment of duty was provisional. This means that payment of duty under the Act can be treated as provisional under two situations. First situation is where the payment is made in strict compliance with the provisions contained in Rule 9B of the Rules. The second one is the payment effected during finalisation of the classification list or price list. This payment during the interregnum will also be provisional even if Rule 9B is not followed.
5. Supreme Court in later decision Coastal Gases & Chemicals Pvt. Ltd. vs.Asstt. C.C.E., Visakhapatnam, 1997 (92) ELT 460 took it that in Samrat International (P) Ltd. case payment of duty was made provisionally by following the procedure under Rule 9B. In the Samrat International case the Court observed:
"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 was in accordance with the procedure for provisional assessment."
In Samrat International (P) Ltd., their inferred payment in accordance with the procedure for provisional assessment in the absence of compliance with the procedure contemplated by Rule 9B. On the facts of Coastal Gases & Chemicals Pvt. Ltd., the Court was not convinced of the payment of duty on provisional basis. Consequently, the matter was remanded to the jurisdictional authority observing:
"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 International's case (supra)"
The said observation does not lead to the conclusion that payment of duty can be provisional only when the procedure prescribed by Rule 9B is strictly followed.
6. From the above discussion, 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 finalisation of classification list or price list. Subject to this clarification, we agree with the observations and findings arrived at by the said Bench in Misc.Order No. 47/2000-A.
7. The issue referred is answered in the above terms.