Provisional excise assessment on revised contract prices keeps refund claims alive despite no Rule 9B bond

Clearances made on provisional prices, with the department informed of retrospective price revision and differential duty paid on upward revisions, are to be treated as provisional assessments. In that situation, the assessment does not become final merely because no bond was executed under Rule 9B of the Central Excise Rules. The limitation bar applicable to final assessments therefore does not defeat a refund claim arising from downward price revision, and the refund is not time barred. The assessee remains entitled to refund with consequential relief where the price variation arrangement was disclosed and accepted in practice by the department.

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Issues: Whether refund of excise duty was barred by time when the assessee had cleared goods on provisional price basis and no bond was executed under Rule 9B of the Central Excise Rules.

Analysis: The assessee had informed the department that clearances were being made on the basis of provisional prices fixed by the oil companies and that differential duty was being paid whenever prices were revised upward. The supply contracts also showed that prices were subject to retrospective revision. In these circumstances, the assessment was to be treated as provisional. Once the department accepted differential duty on upward revision, it could not treat the assessment as final and reject refund on downward revision as time barred. The absence of a bond under Rule 9B did not alter the provisional character of the assessment where the department had notice of the price variation arrangement.

Conclusion: The refund claim was not time barred and the assessee was entitled to refund with consequential relief.

Ratio Decidendi: Where the department is informed that clearances are made on provisional prices and the contract provides for retrospective price revision, the assessment is to be treated as provisional and the limitation bar applicable to final assessments does not defeat the refund claim, even if no bond under Rule 9B was executed.

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