Provisional assessment of clearances allows differential duty recovery on finalisation without limitation or a fresh notice.

Clearances made while classification lists remained unapproved were treated as provisional assessments, because final approval had not been granted and the goods were removed on the declared lists without the prescribed provisional procedure. On that basis, differential duty became recoverable on finalisation of assessment, so the demand was not barred by limitation. The earlier show cause notice on reclassification was held sufficient to cover recovery of the differential amount, and no fresh notice was required before enforcement of the liability.

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Issues: (i) Whether clearances made by the assessee during the pendency of approval of classification lists were under approved classification lists or were to be treated as provisionally assessed clearances. (ii) Whether the demand for differential duty for the relevant period was time barred and whether a fresh show cause notice was before recovery of such duty.

Issue (i): Whether clearances made by the assessee during the pendency of approval of classification lists were under approved classification lists or were to be treated as provisionally assessed clearances.

Analysis: The classification lists had not been finally approved when the goods were removed. A show cause notice had already been issued proposing reclassification, and the clearances during the intervening period were made on the basis of the declared lists without following the prescribed procedure for provisional assessment. The statutory scheme treated such clearances as provisional, and the absence of final approval negatived the claim that the removals were under approved classification lists.

Conclusion: The clearances were to be treated as provisionally assessed clearances and not as clearances under approved classification lists, against the assessee.

Issue (ii): Whether the demand for differential duty for the relevant period was time barred and whether a fresh show cause notice was required before recovery of such duty.

Analysis: Since the duty paid on the disputed clearances was deemed to be paid under provisional assessment, the differential duty became recoverable on finalisation of the assessment. In that situation, the demand could not be treated as time barred. The earlier notice regarding reclassification sufficiently covered the liability, and no separate fresh notice was necessary for recovery of the differential amount.

Conclusion: The demand for differential duty was not time barred and no fresh show cause notice was required, in favour of the Revenue.

Final Conclusion: The impugned finding that the demand was time barred was set aside, and the Revenue's challenge succeeded on the question of recoverability of differential duty.

Ratio Decidendi: Where clearances are made pending final approval of classification or price lists and the goods are deemed to have been assessed provisionally, differential duty may be demanded on finalisation without being defeated by limitation or the absence of a fresh notice for the same liability.

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