Provisional assessment bars Section 11A recovery until finalisation, making an early show cause notice premature and unsustainable.

A show cause notice under Section 11A of the Central Excise Act is not maintainable while provisional assessment under Rule 9B of the Central Excise Rules, 1944 remains pending. Because the assessment had not been finalised, recovery proceedings for alleged short payment could not validly begin at that stage, and the relevant date for limitation would arise only after adjustment on final assessment. The notice was therefore premature and incapable of sustaining the demand; the related demand and penalty orders were set aside.

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Issues: Whether a show cause notice issued under Section 11A of the Central Excise Act during the currency of provisional assessment under Rule 9B of the Central Excise Rules, 1944 was valid and maintainable.

Analysis: The assessment for the relevant period was admittedly provisional and had not been finalized when the show cause notice was issued. In such a situation, recovery proceedings for alleged short payment could not validly be initiated under Section 11A before final assessment, because the relevant date for limitation arises only after adjustment on finalization of provisional assessment. The notice was therefore issued prematurely and could not sustain the demand.

Conclusion: The show cause notice was invalid and not maintainable; the consequent demand and penalty orders were set aside, and the appeals were allowed.

Ratio Decidendi: A show cause notice under Section 11A of the Central Excise Act is not maintainable while provisional assessment under Rule 9B of the Central Excise Rules, 1944 remains pending; proceedings for short levy can commence only after final assessment.

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