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TMI Blog2011 (3) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... y the jurisdictional Assistant Commissioner, wherein they have claimed deduction under 15 accounts. The assessments were kept provisional at that time. The Assistant Commissioner vide order dated 30/04/97 allowed the claim of the assessee in respect of 10 accounts and disallowed the following balance 5 discounts in respect of (i) Special Secondary Packing, (ii) C & F Agent Remuneration (ii) Quantity discount (iv) Discount on damages (v) Handling charges. 3. The party went in appeal before the Commissioner (Appeals) who remanded the case for denovo adjudication vide order dated 27/05/2008 and the Assistant Commissioner vide his order dated 31/08/98 disallowed the quantity discount and discount on account of damages and confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 25/02/2003 for the rejection of the refund. Since the assessee took some time for replying to the show-cause notice and sought extension time for personal hearing, the Assistant Commissioner without hearing the assessee passed an order dated 22/04/2003 rejecting their claim only on the ground that the encashment of bank guarantee for disallowance of quantity discount cannot be equated or termed as pre-deposit under Section 35F of the Central Excise Act, 1944 and the assessee was required to file required refund claim in format R-1 prescribed under Rule 173S of the Central Excise Rules, 1944. 4. The assessee filed an appeal before the Commissioner (Appeals), who upheld the order of the Assistant Commissioner and rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ELT 152 (Tri.) wherein it has been held that in the case of provisional assessment furnishing of security in the shape of bank guarantee or otherwise is to be treated as payment of duty in anticipation of finalization of duty liability, and the same cannot be regarded as pre-deposit within the meaning of Section 129E of the Customs Act, 1962. 7. We have considered the rival submissions. 8. In the instant case, the goods were assessed to duty provisionally and the assessee had executed a bond and bank guarantee for the provisional assessment in terms of 9 (B) of the Central Excise Rules, 1944. Rule 9 (B) (5) specifically provides when the provisional assessment is finalized, the duty provisionally pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons issued by the Board. 9. In the Oswal Agro Mills case the apex Court held as follows:- The bank guarantee is security for the Revenue, that in the event the Revenue succeeds its dues will be recoverable, being backed by the guarantee of a bank. In the event, however, unlikely, of the bank refusing to honour its guarantee it would be necessary for the Revenue or, where the bank guarantee is in favour of the principal administrative officer of the Court, that officer to file a suit against the bank for the amount due upon the bank guarantee. The amount of the disputed tax or duty that is secured by a bank guarantee cannot, therefore, be held to be paid to the Revenue. There is no question of its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment should have suo motu refunded the amount paid in excess on the basis of a simple letter from the assessee. We also find that as held by the Hon'ble apex Court in the case of in the Oswal Agro Mills, cited (supra), the provisions of Section 11B is not attracted when refund arises due to encashment of bank guarantee. 11. In the light of the Hon'ble Supreme Court's judicial pronouncements, we are of the view that the assessee was entitled to refund on the basis of simple letter rather than following the detailed procedure prescribed under Section 11B of the Central Excise Act, 1944. Accordingly, we allow the appeal filed by the party with consequential relief, if any. &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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