Provisional assessment cannot be implied where CAS-4 valuation and ER-1 disclosures are already on record.

Where an assessee had not consciously opted for provisional assessment, excise authorities could not treat captive clearances as provisional by implication and rework duty annually on a CAS-4 basis. The text states that valuation of semi-finished goods cleared to sister units under Rule 8, supported by CAS-4 certificates and disclosed in ER-1 returns, was sufficient to negate suppression. It further notes that, absent intent to evade duty, the extended limitation period and penalty were not attracted, and the demand and penalty were therefore unsustainable on that reasoning.

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Issues: Whether, in the absence of an option exercised by the assessee for provisional assessment, the excise authorities could nevertheless treat the clearances as provisional and re-determine duty liability on the basis of annual CAS-4 valuation, and whether the demand and penalty could be sustained on that basis.

Analysis: The assessee had cleared semi-finished goods to sister units for captive consumption and had valued them under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 on the basis of CAS-4 certificates furnished with returns. The Tribunal followed its earlier decision on the same valuation method and held that, where the assessee had not opted for provisional assessment, the department could not unilaterally deem the clearances to be provisional and finalise them year-wise as if under provisional assessment. The reasoning also accepted that disclosure in ER-1 returns and submission of CAS-4 certificates negatived any allegation of suppression or intent to evade duty for invoking the extended period.

Conclusion: The demand and penalty were not sustainable, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: In the absence of a conscious election by the assessee for provisional assessment, excise authorities cannot treat assessed clearances as provisional by implication and proceed to rework duty on that footing; where valuation is disclosed through CAS-4 and returns, suppression and extended limitation are not attracted absent intent to evade duty.

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