Provisional assessment must be finalised before duty demand, and Section 11AC penalty cannot apply before commencement.

Duty paid while price list approval was pending was treated as provisional assessment, so the recovery machinery under the proviso to Section 11A of the Central Excise Act had to await finalisation of those assessments before any short-levy demand could be raised. Penalty under Section 11AC was unavailable for the relevant period because that provision had not yet come into force, and a penal levy cannot operate retrospectively absent express statutory authority. The matter was remitted for reconsideration after finalisation of the provisional assessments, with any proceedings depending on that exercise.

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Issues: (i) Whether the duty demand under the proviso to Section 11A of the Central Excise Act could be pursued without first finalising the provisional assessments where price lists were pending approval. (ii) Whether penalty under Section 11AC of the Central Excise Act was sustainable for a period prior to its coming into force.

Issue (i): Whether the duty demand under the proviso to Section 11A of the Central Excise Act could be pursued without first finalising the provisional assessments where price lists were pending approval.

Analysis: The dispute related to a period when the price lists were under consideration of the jurisdictional authorities and duty had been paid during that pendency. In such circumstances, assessments were to be treated as provisional. The proper course was to finalise those provisional assessments first, and only thereafter could any demand for short levy be considered under the statutory machinery.

Conclusion: The demand under the proviso to Section 11A could not be pursued before finalisation of the provisional assessments.

Issue (ii): Whether penalty under Section 11AC of the Central Excise Act was sustainable for a period prior to its coming into force.

Analysis: The penalty provision had not yet come into force during the relevant period of dispute. A penal provision cannot be applied retrospectively unless the statute so provides, and no such basis was available here.

Conclusion: Penalty under Section 11AC was not permissible for the relevant pre-commencement period.

Final Conclusion: The matter was sent back for reconsideration after finalisation of the provisional assessments, and any further proceedings could arise only in accordance with the result of that exercise.

Ratio Decidendi: Where duty is paid during the pendency of price list approval, the assessment remains provisional and the recovery machinery must await finalisation of that assessment; a penal provision cannot be applied to a period anterior to its commencement.

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