Provisional assessment under repealed excise rules survives under saving provision, with finalisation and refund following under the new regime.

The earlier permission for provisional assessment under Rule 9B of the Central Excise Rules, 1944 was held to survive the coming into force of the Central Excise Rules, 2002 by virtue of section 38A(c), which preserves accrued rights, obligations and liabilities unless a contrary intention appears. The prior provisional assessment could not be treated as ineffective merely because the old rules had been superseded, so refusal to finalise it on that basis was unsustainable. The record also disclosed no deliberate delay or laches by the assessee. Finalisation was therefore required under Rule 7 of the 2002 Rules, with the consequential refund and interest to follow.

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Issues: Whether the permission granted for provisional assessment under Rule 9B of the Central Excise Rules, 1944 continued to remain valid after the Central Excise Rules, 2002 came into force, and whether the assessment and consequential refund could be denied as time-barred.

Analysis: The existing permission for provisional assessment was held to survive by virtue of the saving provision in section 38A(c) of the Central Excise Act, 1944, which preserves rights, obligations and liabilities accrued under repealed or superseded rules unless a contrary intention appears. On that basis, the earlier provisional assessment could not be treated as ineffective merely because the 2002 Rules had replaced the old regime. The denial to finalize the assessment on the footing that it was not provisional was therefore unsustainable. The record also showed no deliberate delay or laches on the part of the assessee in seeking finalisation. Once the assessment was to be treated as provisional, finalisation and refund had to follow under the new procedural regime.

Conclusion: The assessee succeeded; the refusal to finalise the provisional assessment was set aside and the matter was remanded with directions to finalise the assessment under Rule 7 of the Central Excise Rules, 2002 and grant the resultant refund with interest.

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