Provisional excise assessment and limitation for differential duty turn on express provisional treatment and finalisation date.

A provisional assessment under Rule 9B can be sustained where the proper officer expressly treats the assessment as provisional in the course of further enquiry on classification, even if a bond was not executed, provided the surrounding correspondence, re-examination and the assessee's request for correction support that characterisation. On that basis, duty liability may be finally adjusted on finalisation, and the limitation period for demanding differential duty under Section 11A runs from the date of such final adjustment rather than the original clearance date. The text also notes that prior rejection of the challenge to provisional assessment reinforced the demand's timeliness.

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Issues: (i) Whether the classification list and clearances for reclaimed rubber were validly subjected to provisional assessment under Rule 9B of the Central Excise Rules, 1944. (ii) Whether the demand for differential duty was barred by limitation under Section 11A of the Central Excises and Salt Act, 1944.

Issue (i): Whether the classification list and clearances for reclaimed rubber were validly subjected to provisional assessment under Rule 9B of the Central Excise Rules, 1944.

Analysis: The approved classification list was later stated to be provisional by the proper officer, who referred to completion of further correspondence on the matter. The majority held that this reflected further enquiry within the scope of Rule 9B(1)(c). The fact that the assessee had sought correction of the classification list, the department had pending correspondence and re-examination of the classification issue, and the assessment was expressly treated as provisional were taken as sufficient to sustain provisional assessment. Non-execution of a bond was held not to invalidate the provisional character where the assessee was working under a personal ledger account and the legal procedure otherwise supported provisional assessment.

Conclusion: The assessment was validly treated as provisional.

Issue (ii): Whether the demand for differential duty was barred by limitation under Section 11A of the Central Excises and Salt Act, 1944.

Analysis: Once the assessments were held to be provisional, the duty could be finally adjusted on finalisation, and the period of limitation for demanding short levy ran from the date of adjustment after final assessment. The majority held that the demand issued after finalisation was within time and that the earlier appellate order rejecting the assessee's challenge to the provisional assessment further supported this position. The decisions relied on by the assessee were distinguished on facts because, in this case, provisional assessment had been specifically ordered and enquiry on the classification issue had been ongoing.

Conclusion: The demand was not barred by limitation.

Final Conclusion: The provisional assessment was upheld, and the duty demand survived limitation, so the Revenue's appeal succeeded.

Ratio Decidendi: A clear direction by the proper officer treating assessment as provisional, issued in aid of further enquiry on the classification issue, is sufficient to attract Rule 9B; where assessment is provisional, the limitation for differential duty runs only on finalisation of assessment.

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