Provisional clearance conditions may not be used to block goods where a bank guarantee cannot be furnished.

Pending final classification, the Collector's power under Rule 9B(3) of the Central Excise Rules, 1944 extended to deciding whether surety, security or other approved conditions should be insisted upon for provisional clearance of goods. That requirement could not be imposed later in a way that effectively blocked clearance by demanding a bank guarantee the assessee could not obtain. Interim protection was therefore warranted until classification was finalised by a speaking order, and the assessee was entitled to clear the goods on furnishing a B-13 bond without surety, security or bank guarantee.

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Issues: Whether, pending final classification, the assessee could be required to furnish a B-13 bond with surety, security or bank guarantee as a condition for clearing the goods.

Analysis: Rule 9B(3) of the Central Excise Rules, 1944 was treated as empowering the Collector, at the stage of provisional acceptance of classification, to decide whether a surety, sufficient security or any other condition approved by him should be insisted upon. The requirement could not be left to later departmental insistence in a manner that effectively made clearance dependent on a bank guarantee which the assessee was unable to procure. In the circumstances, interim protection was warranted until the final classification was made by a speaking order.

Conclusion: The assessee was entitled to clear the goods on furnishing a B-13 bond without surety, security or bank guarantee until the final classification order was passed.

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