Provisional excise classification keeps limitation open until final assessment, and small scale exemption failed for sub-heading 7207.10 goods.

Clearances made under a classification list kept provisional are treated as provisional until final approval, so limitation under Section 11A runs from the date of final adjustment after assessment. On that basis, the notice issued after finalisation of the classification was within time. Goods classified under sub-heading 7207.10 were also held outside the scope of Notification No. 1/93-C.E., so the small scale exemption was unavailable. The demand was therefore not time-barred and the exemption claim failed.

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Issues: Whether the demand of central excise duty was barred by limitation when the classification list effective from 1-4-1995 had been kept provisional and was finalised only on 6-12-1995, and whether the assessee could claim the benefit of the small scale exemption under Notification No. 1/93-C.E. for goods classified under sub-heading 7207.10.

Analysis: The classification list filed effective from 1-4-1995 had not been finally approved and was specifically treated as provisional in the show cause notice. Once the classification was finally settled on 6-12-1995, the clearances made in the meantime were to be treated as provisional for all purposes. In such cases, the date of final adjustment after assessment is the relevant date for limitation under Section 11A of the Central Excises Act, 1944. The notice issued on 19-1-1996 was therefore within six months from the relevant date. Since the goods were held classifiable under sub-heading 7207.10, they were not eligible for the small scale exemption under Notification No. 1/93-C.E.

Conclusion: The demand was not time-barred and the exemption claim failed; the issue was decided against the assessee.

Final Conclusion: The appeal failed because the provisional assessment regime made the demand notice timely after finalisation of classification, and the assessee was not entitled to the claimed exemption on the classified goods.

Ratio Decidendi: Where clearances are made under a classification list kept provisional and finally approved later, limitation under Section 11A runs from the date of final adjustment of duty after final assessment, and the provisional clearances are treated as provisional for all purposes.

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