RT-12 assessment on filed returns: no prior notice needed for undisputed duty computation; Section 11A inapplicable.

Under the special RT-12 assessment procedure, duty on yarn captively consumed in the same factory could be assessed on the basis of returns already filed by the assessee, and no prior show cause notice was required where the quantity and rate were undisputed and the exercise was only arithmetical. Section 11A of the Central Excises and Salt Act, 1944 was held inapplicable because the matter arose from assessment under Rule 173-I rather than from unassessed duty requiring notice under that provision. The interim order did not suspend the return-filing or assessment process, so the demand was valid and the refund direction was unsustainable.

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Issues: Whether the demand for excise duty on yarn captively consumed in the same factory was invalid for want of prior show cause notice and barred by limitation, and whether the amounts paid pursuant to the interim order were liable to be refunded.

Analysis: The assessees had opted for the special procedure under Chapter VII-A of the Central Excise Rules, 1944 and filed RT-12 returns under Rule 173G. Under Rule 173-I, the proper officer was required to assess the duty on the basis of the returns and complete the assessment memorandum; on these facts, no prior notice to the assessee was mandated before assessment. The interim order had restrained levy and collection, but it did not suspend filing of returns or dispense with the assessment procedure. The demand was based on the assessee's own returns, the quantity cleared and the rate of duty were not in dispute, and the exercise was treated as an arithmetical determination rather than a fresh adjudication requiring a show cause notice. Section 11A of the Central Excises and Salt Act, 1944 was held inapplicable because the matter arose from assessment under Rule 173-I and not from a case of unassessed duty requiring notice under that provision. The earlier decision relied upon by the assessee was distinguished as a case where Section 11A itself applied and limitation under that provision was in issue.

Conclusion: The demand was valid, no prior show cause notice was required, Section 11A of the Central Excises and Salt Act, 1944 did not bar the recovery, and the refund ordered by the Single Judge was unsustainable.

Final Conclusion: The Revenue succeeded in overturning the quashing of the demand and the refund direction, while the assessee's cross-appeal failed.

Ratio Decidendi: Where duty is assessed under the special RT-12 procedure on the basis of returns already filed by the assessee, and the dispute is confined to computation of duty on undisputed quantities and rates, prior notice under Section 11A of the Central Excises and Salt Act, 1944 is not a condition precedent and the demand is not governed by that provision's limitation regime.

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