Limitation barred differential excise duty demand on captive resin consumption where no provisional assessment had been invoked

Differential excise duty on captive consumption of urea formaldehyde resin was held time-barred because the earlier approved assessable value remained operative until further orders and no provisional assessment or fresh assessment procedure had been invoked at the relevant stage. The Tribunal found that the demand was raised only later after finalisation of the price, and the attempt to invoke provisional assessment provisions was unjustified on the facts. As no action had been taken within the normal limitation period, recovery for the earlier period could not be sustained. The cited authority on provisional pricing was distinguished as fact-specific and not a general rule permitting recovery beyond limitation.

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Issues: Whether the demand for differential excise duty on the captive consumption of urea formaldehyde resin was barred by limitation where the earlier price approval was not provisional and no fresh assessment procedure had been invoked.

Analysis: The assessable value approved for the earlier period was operative till further orders, and the authorities did not resort to provisional assessment or require a fresh price list at the relevant stage. The demand was raised only later, in pursuance of the order finalising the price, and the invocation of provisional assessment provisions was held to be unjustified on the facts. In the absence of steps taken within the normal period of limitation, the Tribunal held that the demand could not survive for the earlier period. The cited decision on provisional pricing was distinguished on the ground that it turned on its peculiar facts and did not lay down a general rule permitting recovery beyond limitation.

Conclusion: The demand was time-barred and the assessee succeeded.

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