ORDER
R. Jayaraman, Member (T)
1. All the aforesaid nine appeals have been filed against the same Order-in-Appeal No. 157 to 165/95 (66 to 74-Raj) CE/Collr (A)/Ahd, dated 27-3-1995 of the Collector of Central Excise (Appeals), Bombay.
2. The facts are not elaborately recorded because the appeals are mainly argued on merits on the legal position as to whether appeals are sustainable in respect of provisional assessment orders passed by the Assistant Collector. The appellants’ filed classification lists claiming benefit of Notification No. 1/93, dated 28-2-1993. The classification lists were approved provisionally with the direction to comply with the procedure prescribed under Rule 9B of the Central Excise Rules, 1944. Against that order, the appellants went in appeal before the Collector (Appeals). The Collector (Appeals) held that there is no legal basis for the appellants grievances at this stage, when the classification lists continue to be under provisional assessment and even the benefit, as claimed in the classification lists, has been allowed by the Assistant Collector provisionally. There is no requirement under Rule 9B to issue a Show Cause Notice before ordering provisional assessment. Only when the provisional assessment is sought to be finalised and duty demand is called for, Show Cause Notice is necessary. However, he observed that it is not a healthy proposition to keep the assessment provisional for a long period of time. Hence the appeals were dismissed as not maintainable at this stage with direction to the Assistant Collector to finalise the classification lists approved provisionally within 30 days of receipt of the order. The present appeals have been filed against the aforesaid order.
3. Shri Shailesh P. Sheth, the ld. Advocate for the appellants, pleads that these classification lists have been provisionally approved, presumably on the basis of an appeal filed by the department against the Collector’s order in adjudication allowing a Small Scale exemption benefit. However, no specific reasons are given in the order passed by the Assistant Collector under Rule 9B. The only reason stated is that an exemption claimed by the assessee under Notification No. 1/93 prima facie does not seem to be in order as correct Notification No. is…. However, the Assistant Collector has provisionally allowed the benefit as claimed by them but they are exposed to race a demand at a subsequent stage without knowing any reason for provisional assessment. Hence such an order of provisional assessment was appealed against before the Collector (Appeals), who has held that such an appeal is not maintainable at this stage. He refers to the prima facie order passed by the Special Bench ‘A’ in the case of Indian Aluminium Cables Ltd. v. Collector – 1989 (41) E.L.T. 688A, (a three member decision) wherein it has been held that provisional assessment order is also an order which is appealable and hence the Collector (Appeals) is not correct in holding that the appeals are not maintainable.
4. After hearing both the sides, we find that Rule 9B of the Central Excise Rules, empowers the proper officer to resort to provisional assessment –
(a) where the proper officer is satisfied that the assessee is unable to produce any document or furnish any information necessary for assessment of duty; or
(b) where the proper officer deems it necessary to subject the excisable goods to chemical test or any other test for purpose of assessment; or
(c) where all the documents or information have been furnished, but the proper officer deems it necessary to make further enquiries (including enquiry to satisfy himself about the observance of the conditions imposed in respect of the goods after their removal).
Section 35 of the Central Excises and Salt Act, 1944 permits any person aggrieved by any decision or order passed under the Act, by the officers lower in rank than a Collector of Central Excise to file the appeal against such an order. An order of provisional assessment passed under Rule 9B is also on the satisfaction of the proper officer on the circumstances warranting provisional assessment. Hence it is an order relating to assessment of the goods passed by an officer lower to rank to that of the Collector. Hence Collector (Appeals) is not justified in holding that no appeal against the order of provisional assessment is legally maintainable.
5. All the same, we agree with the Collector that order of provisional assessment cannot be said to be final. Hence a Show Cause Notice is not a. ‘must’ in ordering provisional assessment. But the order should specifically state the reasons, especially when the order is passed by the Assistant Collector on his own, without a request from the assessee. However in these cases before us, provisional assessments have been ordered accepting the rates of duty as claimed in the classification lists. Hence no grievance can be held against the Assistant Collector that it is causing prejudice to them monetarily. However, when the appellants are kept in the darkness without letting them know of the precise reasons, they can definitely feel aggrieved because of the uncertainty caused by provisional assessment for reasons not known to them. Hence they can come up in appeal before the Collector (Appeals) against the said order.
6. We may not be able to subscribe to the view of the learned advocate that every order of provisional assessment should be preceded by a Show Cause Notice and it could be equated with an adjudication order and challenged on merits. Because, provisional assessment by the very name it suggests, indicates that it is only an interim arrangement based on prima facie considerations. No finality has been arrived at, causing any permanent prejudice to the assessees. Hence, such an order need not be preceded by a Show Cause Notice nor can it be challenged on merits, so long as it falls within the parameters laid down in Rule 9B of the Rules. They will get all the opportunities for putting forth their arguments on merits before the assessment is finalised. Principles of natural justice demand issue of a Show Cause Notice before finalising the assessment. Such an order of final assessment is open for appeal on merits as well. Provisional assessment order, being of the nature of an interim order, even if challenged could not be considered on merits without all the facts being available, as in the case of an adjudication order.
7. Now coming back to the present appeals, we find the precise reason for resorting to provisional assessment has not been given excepting that they are prima facie not eligible for Notification 1/93 but eligible for some other Notification, which number is not given. It is also not specified whether the question regarding their eligibility under Notification 1/93 is under enquiry by the proper officer. It is not spelt out whether any information is wanting from the appellants in this regard. On this ground, we agree that the order of provisional assessment per se is defective. Hence, we interfere with the order of the Assistant Collector by directing him to give the precise reasons for resorting to provisional assessment, apart from carrying out the direction of the Collector (Appeals) for expeditious finalisation of provisional assessments.
8. All the above nine appeals are disposed of in the above terms.