Provisional assessment and lack of suppression barred immediate demand; valuation and limitation needed fresh adjudication.

Provisional price-list approval can make valuation adjudication premature where assessments were not finally completed, because demand and penalty should not be confirmed until the status of assessment is determined. Limitation and suppression also require fresh examination where the department already had access to the relevant price-lists, gate passes and returns, making concealed facts difficult to infer on the existing record. The impugned orders were set aside and the matter remitted for fresh adjudication after hearing the assessee.

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Issues: (i) Whether the demand and penalty could be sustained when the price-lists indicated provisional approval and the assessment may not have been finalised; (ii) Whether the demand was barred by limitation in the absence of suppression of facts.

Issue (i): Whether the demand and penalty could be sustained when the price-lists indicated provisional approval and the assessment may not have been finalised.

Analysis: The price-lists bore endorsements showing provisional approval subject to verification of margin of profit or cost of manufacture. The record did not show that this aspect had been examined by the adjudicating authority. If the assessments remained provisional and were not finalised, confirmation of demand would be premature.

Conclusion: The demand could not be upheld without first determining whether the assessments had remained provisional and, if so, whether adjudication was premature.

Issue (ii): Whether the demand was barred by limitation in the absence of suppression of facts.

Analysis: The department was already aware of the value at which the scrap was cleared on payment of duty, and the same officers had access to the relevant price-lists, gate passes, and RT 12 returns. In those circumstances, suppression of the fact that the scrap was being used for manufacture of machinery parts could not readily be inferred. The alternative contention of superior quality of the duty-paid scrap was also unsupported by evidence.

Conclusion: Limitation and suppression required fresh consideration and the demand could not be sustained on the existing findings.

Final Conclusion: The impugned orders were set aside and the matter was remitted for fresh adjudication after hearing the assessee.

Ratio Decidendi: Where the assessment is shown to be provisional and not yet finalised, adjudication on valuation is premature; further, suppression cannot be inferred when the relevant facts were already within the department's knowledge from the records available to it.

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