Revenue demand under Tariff Item 68 barred by limitation under Section 11A; no Rule 9B provisional classification found

SC held the Revenue's demand under Tariff Item 68 is barred by limitation. The Court found no Rule 9B order or evidence that clearances or duty payments were made on a provisional classification; the Assistant Collector's order was held to be final. Absent a show cause notice and any provisional classification, Section 11A's limitation applies and precludes the Revenue from making a demand, rendering it unnecessary to decide the correctness of the Tribunal's classification. Decision in favour of the assessee.

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Issues: Whether the Revenue's demand is barred by limitation for want of a show cause notice as required by law under Section 11A of the Central Excises & Salt Act, 1944.

Analysis: The record shows no formal show cause notice issued in the manner and within the period required by Section 11A and Rule 10; mere correspondence, letters or parts of orders cannot substitute for the statutory notice. There is no material demonstrating that clearances were made under a provisional classification pursuant to an order under Rule 9B or that duty was paid provisionally on that basis. An interim order of the High Court staying operation of a revision order did not specifically restrain issuance of a show cause notice and thus does not avail the Revenue to extend the limitation period under the Explanation to Section 11A. Authorities recognizing that stay of collection does not excuse the requirement of notice have been applied.

Conclusion: The demand is barred by limitation for want of a valid show cause notice; the appeals are allowed and the impugned orders are set aside in favour of the appellants (assessee).

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