Unsupported cost audit observations cannot sustain provisional excise assessment orders when no verified material supports the departmental finding.

Provisional excise assessment orders could not be sustained where the departmental observations relied on to keep the assessments provisional were unsupported by any verified data or material on record. The record showed that neither the assessment orders nor the appellate proceedings contained evidence substantiating the cost audit report observations, so the finding treating them as established facts rested on assumption rather than proof. On that basis, the orders were set aside as lacking an evidentiary foundation and therefore unsustainable in law, with relief granted to the assessee.

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Issues: Whether the provisional assessment orders, founded on observations of the cost audit report without supporting data or verification, could be sustained.

Analysis: The challenge was to provisional assessment orders passed under the excise valuation framework. The record showed that the departmental observations relied upon for keeping the assessments provisional were not backed by any supporting data in the assessment orders or before the appellate authority. The absence of material to substantiate those observations meant that the appellate finding treating them as established facts rested on assumption rather than verified evidence.

Conclusion: The provisional assessment orders could not be sustained and were rightly set aside, resulting in relief to the assessee.

Final Conclusion: The appeals succeeded because the impugned order lacked an evidentiary foundation and was therefore unsustainable in law.

Ratio Decidendi: An order affecting assessment cannot stand when it is based on unverified assumptions and unsupported observations rather than demonstrable material on record.

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