1. This appeal has been filed against Order-in-Appeal No. 134/2003 dated 31.10.2003 passed by the Commissioner of Customs and Central Excise (Appeals), Hyderabad.
2. Shri V.J. Sankaram, learned Advocate appeared on behalf of the appellants and Shri T.C. Raja Dass, SDR for the Revenue.
3. We heard both sides. The appellants are the manufacturers of electric wires and cables which are excisable. They were assessing the underground telephone cables manufactured by them under the erstwhile Rule 9B of Central Excise Rules, 1944 on a provisional basis vide Clause (d) of the assessment memorandum. On receipt of the RT-12s for the period from October 1996 to February 1998, the Range Superintendent made an endorsement in the assessment memorandum in the following manner "that the procedure laid down under Rule 9B has not been followed and the assessment cannot be made provisional". A show cause notice was issued to the appellants for denial of the provisional assessment on the ground that they had not followed the proper procedure, as that there was no proper sanction of law for provisional assessment under Rule 9B. In the absence of the order of the Asst.
Commissioner of the Division for provisional assessment, the Original Authority in the Order-in-Original dated 4.6.1999 rejected the request of the assessee for ordering provisional assessment. He ordered that the assessment made provisionally by assessee themselves for the period from October 1996 to December 1998 under Rule 9B shall be treated as finally assessed. He imposed a penalty of Rs. 1,000/- on the appellant under Rule 210 of the Central Excise Rules, 1944 for the contravention of the provisions of Rule 9B of the Central Excise Rules, 1944.
Further, he advised the appellants to follow the provisions of Rule 233B and pay duty under protest for overcoming six months limitation period with respect to refund claim to be filed, if any. He also ordered that the appellants should file the self assessed RT-12's every month, henceforth, without claiming any provisional assessment. The appellants were highly aggrieved over the impugned order of the lower authority. Therefore, they approached the Commissioner (A). The Commissioner (A) in the impugned order upheld the order of the Asst.
Commissioner. Hence, the appellants have come before this Tribunal.
4. The learned advocate submitted that the appellants are a Government of India undertaking setup in 1974. The goods were being supplied to the Department of Telecommunication (DOT). The contract entered by the appellant with the purchasers namely DOT contain price variation clause. In terms of the contract, the price could be settled at appropriate level if the value of the copper in the goods supplied were to be revised. In view of the above position, it was urged that the prices at which the goods are initially supplied to DOT are necessarily provisional. The revision of price was taking place as a matter of routine occurrence over the years. The appellants executed a Bond for the preceding period for provisional assessment and in fact, refund of Rs. 1,73,04,874/- was granted in the order dated 17.6.97. However for the subsequent period, the department rejected the provisional assessment on the ground that there was no Bond and Bank Guarantee as per Rule 9B of the Central Excise Rules, 1944. From the pattern of clearance and supply orders, it can be clearly seen that the assessments are always provisional. It was also pointed out that in the impugned order the learned Commissioner has held that the appellant is an undertaking belonging to the Government of India and therefore, it would a Government Company within the meaning of Section 617 of the Companies Act, 1956 and hence, they are not exempt from executing Bond and Bank Guarantee. The learned advocate stated that even though the appellant placed reliance on the decision of the Hon'ble Apex Court in the case of Samarat International Ltd. v. Collector , the Commissioner (A) has ignored the same and relied on certain Tribunal decisions and upheld the order of the Original Authority.
Further, the learned Advocate relied on the decision of the Tribunal in the case of TVS Motor Co. Ltd. v. CCE, Chennai 2007 (215) ELT 298 (Tri-Chennai) wherein it was held that permission for provisional assessment was not liable to be denied on the ground that any formal request had not been made by the assessee at the commence of the financial year.
5. On the other hand, the learned SDR relied on the decision in the case of Rajiv Mardia v. CCE & C, Indore wherein it is held that compliance with requirement of Rule 9B is necessary for provisional assessment. He also relied on the Tribunal's decision in the case of Hindustan Wires Ltd. v. CCE, Delhi-II wherein it was held that formal request for provisional assessment in terms of Rule 9B is very necessary.
6. On a very careful consideration of the facts, we find that the price at which the appellants initially cleared the goods were not final. On this point, there is no dispute. In fact, the appellants have produced evidence to show that prior to the period of dispute in this appeal they had been furnishing Bonds along with security. The only reason for denying the provisional assessment facility is that the proper officer did not give the necessary order and also the appellants did not follow the procedure prescribed in Rule 9B and there was no Bond and Bank Guarantee. In our view, the denial of provisional assessment is not justified and the decision of the lower authorities appears to have been taken on the flimsy technical grounds. Even though the Commissioner (A) has referred to the Samarat (supra) case relied on by the learned advocate, in the finding portion she has completed ignored the same. In the Samrat case, the Hon'ble Apex Court has held that when the assessee maintains Personal Ledger Account (PLA) there is no need for a Bond under Rule 9B even in cases of provisional assessment. In any case, when the appellant filed the RT-12 returns, it was indicated therein that the assessment was provisional. In spite of this fact, the lower authorities have denied provisional assessment. This does not appear to be correct. In the TVS Motor Co. Ltd. case cited supra, it was held that permission for provisional assessment was not liable to be denied on the ground that any formal request had not been made by the assessee at the commencement of the financial year. In this case, there was definitely a request for provisional assessment but the only objection is not furnishing a Bond and Bank Guarantee. The Revenue's approach in denial of provisional assessment is shortsighted because when the assessment is provisional, the duty initially paid may be less and the assessee may have to discharge the short payment at the time of finalisation. If the department holds such assessments as final, then Revenue would be put to loss. When it is very clear that the initial price is subject to variation, the Revenue officers are bound to order assessments on provisional basis. Their refusal would at times endanger the revenue. In these circumstances, we do not find any merit in the impugned order. We allow the appeal with consequential relief.