By TIOL News Service

MUMBAI, DEC 27, 2015: THE appellant sought provisional assessment for the year 2009 by a letter dated 28.1.2009. The adjudicating authority by an o-in-o 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.

The Commissioner(A) sided with the view of the original authority and rejected the appeal.

Before the CESTAT, the appellant submitted that they have provided all the records for finalizing the provisional assessment from 1996 onwards to the authorities and the assessment are now being undertaken for finalizing the provisional assessment; that the lower authorities were in error in interpreting the provisions of Rule 7 of the CER, 2002 in such fashion.

The AR while justifying the stand taken by the lower authorities relied upon the judgment of the Calcutta High Court in the case of Sachin Bhupendra Desai for the proposition that the provisional assessment and clearance on payment of duty is not on absolute right.

The Bench observed that both the lower authorities had misinterpreted the provisions of Rule 7 of the Central Excise Rules, 2002.

After reproducing the provision of Rule 7(1) of CER, 2002 which reads -

(1) Where the assessee in 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.

, the CESTAT observed -

"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 Kolkata is totally misplaced as the same is in respect of the provisions of Section 18 of the Customs Act, 1962 asking the provisions 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 thereunder (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."

The impugned order was set aside and the appeal was allowed.

(See 2015-TIOL-2784-CESTAT-MUM)