Provisional assessment and cash refund recognised where factory closure left no Account Current for credit

Duty paid while classification approval remained pending was treated as paid under provisional assessment, so the earlier observation denying provisional assessment was deleted on rectification. The unit's closure and the absence of an Account Current meant the usual credit mechanism was unavailable, and the refund was directed to be paid in cash. The rectification application was therefore allowed, and the prior order was modified to reflect provisional assessment and cash refund.

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Issues: (i) Whether the observation that there was no evidence of provisional assessment should be deleted in rectification, and (ii) whether, in view of closure of the factory and absence of an Account Current, the refund should be granted in cash.

Issue (i): Whether the observation that there was no evidence of provisional assessment should be deleted in rectification.

Analysis: The classification list was pending approval during the relevant period and this factual position was not in dispute. In such circumstances, and in light of the cited precedent, the earlier observation that there was no evidence of provisional assessment could not stand.

Conclusion: The sentence stating that there was no evidence of provisional assessment was deleted in favour of the assessee.

Issue (ii): Whether, in view of closure of the factory and absence of an Account Current, the refund should be granted in cash.

Analysis: The closure of the factory had been stated in the appeal memorandum, and on closure no Account Current would be available for crediting the amount. In those circumstances, and following the cited precedent on cash payment where the ledger mechanism is unavailable, the assessee was entitled to receive the refund in cash.

Conclusion: The sentence denying cash payment was deleted and cash refund was allowed in favour of the assessee.

Final Conclusion: The rectification application succeeded, and the earlier order was modified to recognise provisional assessment and to permit cash refund because the factory was closed and no Account Current was available.

Ratio Decidendi: Where duty is paid pending approval of classification and the refund mechanism through Account Current is unavailable due to closure of the unit, rectification may be granted and the refund directed to be paid in cash.

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