Provisional assessment permits recovery of differential duty on finalisation without a show cause notice under the assessment scheme.

In provisional assessment, differential duty arising on finalisation is recoverable under the assessment scheme itself, and a show cause notice under Section 11A is not required. The governing principle applied was that Rule 173-F read with Rule 173-I obliges the assessee to pay the deficiency determined on finalisation by the proper officer. Section 11A proceedings, preceded by notice, are necessary only where short levy, non-levy, or erroneous refund is detected after final assessment. The impugned order was set aside and the Revenue's contention was accepted.

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Issues: Whether, in a case of provisional assessment, a demand for differential duty arising on finalisation of assessment required issuance of a show cause notice under Section 11A of the Central Excise Act, or whether the deficiency could be recovered without such notice under the scheme of Rule 173-F and Rule 173-I of the Central Excise Rules.

Analysis: The earlier decision relied upon by the appellate authority dealt with recovery where duty had not been levied, paid, short levied, short paid, or erroneously refunded, but not with provisional assessment. In the case of provisional assessment, the governing principle is that, upon finalisation, the assessee must pay the deficiency in duty assessed by the proper officer under Rule 173-F read with Rule 173-I. Only where short levy, non-levy, or erroneous refund is detected after final assessment do proceedings under Section 11A, preceded by a show cause notice, become necessary.

Conclusion: The requirement of a show cause notice did not apply to the demand arising from finalisation of provisional assessment. The Revenue's contention was accepted.

Final Conclusion: The impugned order was set aside and the appeal was allowed on the footing that differential duty consequent to finalisation of provisional assessment could be recovered without a show cause notice.

Ratio Decidendi: In provisional assessment matters, differential duty payable on finalisation may be recovered under the assessment scheme itself, and a show cause notice under Section 11A is required only for post-final-assessment cases of short levy, non-levy, or erroneous refund.

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