Provisional central excise assessment requires finalisation before demand can be sustained, with liability tested against actual duty difference.

Provisional central excise assessments require finalisation before any demand can be sustained, and any confirmed liability must be tested against the actual duty difference, if any, on the record. Where the departmental material indicated no short payment of duty and the assessee relied on payment details and reverse working of liability, confirmation of demand without addressing the provisional nature of the assessment was treated as a non-speaking and unsatisfactory exercise. The demand and penalty were therefore not finally sustained, and the matter was remanded for de novo consideration after finalising the provisional assessment.

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Issues: Whether the demand and penalty could be sustained when the assessments were stated to be provisional and the record indicated that duty had already been paid, and whether the matter required remand for fresh consideration.

Analysis: The assessments were not in dispute as being provisional. The record also contained a departmental clarification stating that there was no short payment of duty and that the demand under Section 11A of the Central Excise Act, 1944 was not justified on the facts as presented. In addition, the assessee had pointed to the payment details and the method of working out liability on a reverse process basis. In these circumstances, the confirmation of demand without addressing the provisional nature of the assessment and the material on record showed non-application of mind and rendered the order unsatisfactory as a speaking order.

Conclusion: The demand and penalty were not finally sustained and the matter was remanded to the Commissioner for de novo consideration, including finalisation of the provisional assessment.

Final Conclusion: The impugned order was set aside to the extent necessary and the dispute was sent back for fresh adjudication after finalising the provisional assessment.

Ratio Decidendi: Where an assessment is provisional, the demand must follow finalisation of that assessment and must be tested against the actual duty difference, if any, on a reasoned appraisal of the record.

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