TMI Blog1989 (6) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... de novo consideration, whereupon the Asstt. Collector issued a notice for de novo adjudication on 6-4-1984 and by his order dated 15-10-1984, the Asstt. Collector allowed 7 items of deductions as admissible discounts but disallowed 3 items. In pursuance of this order, the Asstt. Collector also confirmed a demand for an amount of Rs. 5.90 crores. This amount was paid under protest on 31-3-1985. The Department also had issued a certificate of payment vide their letter dated 11-7-1985. The applicants went in appeal before the Collector (Appeals) challenging the disallowance of 2 items of deductions by the Asstt. Collector. This appeal was filed by them on 7-1-1985. However, on 11-10-1985, the Collector of Central Excise, Bombay-III, in exercise of powers conferred under Section 35-E, directed for review of the order of the Asstt. Collector dated 15-10-1984 and in pursuance of this order of the Collector, an appeal by the department came to be filed on 2-12-1985 seeking for setting aside the order of the Asstt. Collr. and for holding that certain deduction allowed by the Asstt. Collr. are not legally correct. In their cross objections to the appeal by the department, the applicants rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application. The demands came to be served on them only on 5-10-1988 and only thereafter, they filed the stay application. He, therefore, argued that even if the order of the Collector (Appeals) is taken as the relevant date, no demand has been issued within a period of six months from the date of the order of the Collector (Appeals) being 28-3-1988. Shri Seervai finally submitted that this is not a case where the applicants have dodged the payment. They have complied with the demand made by the department to the extent of Rs. 5.9 crores, when the assessment was finalised. They have also complied with another demand amounting to Rs. 1.40 crores arising out of the dis-allowance of certain deductions by the Collector (Appeals) since in that case the demand was within the time limit of Section 11A. In this case, the period covering from 1978-83 where provisional assessment was finalised on 15-10-1984 by an order and it is sought to be disturbed and short levy demanded, that could be done only by issue of the show cause notice within the time limit prescribed under Section 11A. He, therefore, contended that prima facie the demand is time barred requiring the grant of stay. He also mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imit. He also contended that the demand for Rs. 1.60 crores has been issued in pursuance of the order of the Collector (Appeals). There is no law provided for issuing such a demand. The applicants themselves are required to make the payment in pursuance of the order of the Collector (Appeals). No limit has been prescribed for issue of such a demand even under the law, just as in the case of refund arising out of the order of the Collector (Appeals), no time limit has been prescribed for claiming such a refund. 4. Shri Seervai replied that in this case, the assessment has already been finalised by the Asstt. Collector, whereupon he confirmed the demand to the extent of Rs. 5.9 crores. He also stated that on payment of this demand, even the B-13 bond has been discharged. He thus refuted the contention of Shri Mondal that the assessment is still provisional. Shri Seervai also submitted that because the demand is prima facie time barred he is not pleading financial hardship. 5. After hearing both the sides and after perusing the essential records for such a prima facie consideration, we observe that the main prima facie issue is linked to the question of time bar. Before going into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deficiency shall be paid and if there is any excess payment, difference shall be refunded. This is the system envisaged under the rules for provisional assessment of the duty. For purpose of making a demand in respect of short levy or in a case where it has not been levied, a demand is required to be issued within a period of six months from the relevant date as per the provisions of Sec. 11A of the C. Ex. Act. The relevant date in the case of provisional assessment is the date of adjustment of duty after the final assessment thereof. 6. The question to be considered is, when the provisional assessment in this case is said to have been finalised? Whether it is on the order passed by the Asstt. Collector dated 15-10-1984 or on 5-10-1988, the date on which the demand has been issued in pursuance of the order of the Collector (Appeals)? The citations made by the learned Sr. advocate are not seriously contested by Shri Mondal because his main plank of defence is that the assessment is still provisional till the date of demand dated 5-10-1988. We are unable to appreciate this argument of Shri Mondal for the following reasons : Even the order of the Collector (Appeals) cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n adjusted by way of payment in the month of March, 1985. It is not the case of the department that after the order dated 15-10-1984 passed by the Asstt. Collector, the applicants have not paid the short levy confirmed and the amount still remains unadjusted till date leaving the provisional assessment open. On the contrary, facts undisputed are that the amount confirmed has been finally adjusted in March, 1985. 8. Viewing this issue from yet another angle, we notice certain salient features, which cannot be over looked - (a) By the order dated 15-10-1984, the Asstt. Collector, adjudicated the issue, and finalised the provisional assessment and demanded a specific amount which according to him was short paid. The amount demanded has also been paid in March, 1988; (b) The applicants preferred an appeal with regard to some of the deductions disallowed; (c) The department did not issue a demand under Section 11A alleging short payment in the final adjustment; and (d) It was only after the Collector invoking his powers under Section 35-E, ordered filing of the appeal, that an appeal came to be filed and that too not for setting aside the whole of the Asstt. Collector s order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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