Provisional assessment under excise law must be proved by statutory procedure; ordinary limitation applies absent suppression or fraud.

Provisional assessment under the Central Excise Rules cannot be presumed from a classification dispute or pending litigation; it must be established through the prescribed procedure and supporting material, including an order under Rule 9-B. On the record, no such basis was shown, so the demand could not escape the ordinary limitation under Section 11A. In the absence of proof of fraud, suppression, wilful misstatement, contravention with intent to evade duty, or any stayed recovery, the extended limitation was unavailable and the demand was time-barred. The excise demand was therefore unsustainable on both grounds.

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Issues: (i) Whether the demand for excise duty could be treated as arising from provisional assessment so as to exclude the ordinary limitation under Section 11A of the Central Excise and Salt Act, 1944. (ii) Whether the notice and demand for recovery of duty were barred by limitation in the absence of proof of fraud, suppression, or a stayed demand.

Issue (i): Whether the demand for excise duty could be treated as arising from provisional assessment so as to exclude the ordinary limitation under Section 11A of the Central Excise and Salt Act, 1944.

Analysis: The record did not show any order under Rule 9-B of the Central Excise Rules, 1944, or any material demonstrating that the clearances and duty payments were made on a provisional basis. The mere existence of a classification dispute, or reliance on earlier litigation, was insufficient to convert the assessments into provisional assessments. The principle applied was that provisional assessment must be established by the prescribed procedure and supporting material, and cannot be presumed from pending proceedings alone.

Conclusion: The demand could not be sustained on the footing of provisional assessment and the issue was decided against the Revenue.

Issue (ii): Whether the notice and demand for recovery of duty were barred by limitation in the absence of proof of fraud, suppression, or a stayed demand.

Analysis: Section 11A prescribed a six-month limitation, with the longer period available only on proof of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. No such material was shown. There was also no proof that any competent court had stayed recovery so as to exclude time. On the facts found, the limitation period ran from the relevant date and the demand was beyond time.

Conclusion: The demand was barred by limitation and this issue was decided against the Revenue.

Final Conclusion: The excise demand was held unsustainable for want of provisional assessment and for being time-barred, so the assessee succeeded and the appeal failed.

Ratio Decidendi: Provisional assessment cannot be inferred merely from a classification dispute or pending litigation; it must be shown by the prescribed statutory procedure and supporting material, and in the absence of fraud, suppression, or a stayed demand, the ordinary limitation under Section 11A applies.

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