Circular No. 288 dated 14^th January 1997

Consequent upon introduction of self-assessment system, amendments in Rule 9B has been affected by Notification No. 36/96-CE (NT) dated 20.11.96 to align it to the new system. The assessee may request for provisional assessment in two situations:

(1)    Where the assessee is unable to determine the value of excisable goods in terms of Section 4 of the Act on account of non-availability of any document or any informations; or

(2)    Where the assessee is unable to determine the correct classification of the goods while filing the declaration under Rule 173B.

1.1   The proper officer may also direct for resorting to provisional assessment in case he finds that self-assessment in not in order and he decides to conduct further inquiry.

1.2   A 'deeming provision has been made to the extent that from the date of filing of request for provisional assessment to the date of decision of proper officer, the assessment will 'deemed to be provisional', so as to enable the assessee to furnish his 'provisionally' assessed return within the stipulated time frame.

1.3   It has also been provided that notwithstanding the provisions of self-assessment, the final assessment in such cases will be made by the proper officer.

2.     In order to streamline the procedure and to have effective monitoring system, it has been decided to prescribe the following guidelines:

2.1   'Provisional Assessment' should be resorted to sparingly and normally as a last option. The dispute regarding classification and valuation should be settled first of all by personal discussion with the highest levels of the assessees management and where unavoidable, by way of adjudication proceedings.

2.2   Provisional Assessment can be ordered only under circumstances mentioned in rule 9B read with Rule 173B & Rule 173C (5).

2.3   Wherever an assessee finds that final assessment is not possible, (in situations mentioned in Rule 9B only) he will make a detailed request to the Divisional Assistant Commissioner of Central Excise, indicating:

a)    Specific grounds, and the documents or information's, for want of which final assessment cannot be made.

b)    Period for which provisional assessment is required.

c)    The rate of duty or the value or both, as the case may be, proposed to be applied by the assessee, for Provisional Assessment.

d)    Undertakes to appear before the Assistant Commissioner within 7 days or such date fixed by him, and furnish all relevant information and documents within the time specified by the Asstt. Commissioner in his order, so as to enable the proper officer to finalise the provisional assessment.

2.4   On receipt of the request, the Assistant Commissioner will immediately examine it, if necessary, in consultation with the concerned Range Officer; to as certain whether Provisional Assessment is necessary at all. If the reasons/ grounds are not sufficient, he may ask the assessee to appear before him on an appointed day and time, and if he is satisfied that Provisional Assessment is not necessary, he may pass a reasoned order rejecting the same and also ordering the rate of duty or the value, to be applied by the assessee. Accordingly, any Provisional Assessment made under the deeming provision, should also be finalised immediately.

2.5   Where proper officer is satisfied that the assessee has correctly requested for resorting to provisional assessment, he will issue a specific order directing Provisional Assessment clearly stating:

(a)   The grounds on which Provisional Assessment has been ordered.

(b)   The rate and/or value, as the case may be, at which duty is to be provisionally paid.

(c)   The amount of differential duty for which bond is to be executed. Covering the period, if any, during which assessee paid duty provisionally under the deeming provisions, after applying the rate and/ or value specified in (b) above.

(d)   The amount of security or surety as may be fixed by Assistant Commissioner keeping in view the instructions issued by the Board from time to time.

2.6   The RT-12 returns and documents covered under Provisional Assessment may be marked by the assessee as "PROVISIONALLY ASSESSED" vide Order No____________ dated ______________"

2.7   Provisional assessment should be finalised within a maximum period of 3 to 6 months. All the cases where provisional assessment are not finalised within 3 months, reported to Commissioner, indicating the name of the unit, grounds, reasons for non-finalisation, amount of differential duty for future clearances.

3.     Thought it is incumbent upon the assessee to ensure that the bond amount and corresponding securities are sufficient, the Divisional as well as the Range Officer will keep a strict vigil on such cases with the help of 'Provisional Assessment Register' - In the format (copy enclosed as Annexure-I) prescribed by DGI vide letter F.No. 585/2/96- dt. 29.8.96. Divisional MTR should also correctly reflect the position of provisional assessment.

3.1   The Commissioner will personally monitor the cases beyond three months and specially those pending beyond 6 months and make all out efforts for early finalisation of case involving large amounts and those being kept pending unececessarly. It is seem that a large number of cases are pending for want of information from the assessees, for want of test report or further enquiry. Cases pending for want of information from the assessee should be finalised by giving one months notice to the assessee as per existing instructions. Those pending for want of test report should be discussed very months with Deputy Chief Chemist for early finalisation. Those pending for want of enquiry must be finalised with in 6 weeks.

3.2   Call book cases where issues are pending with CEGAT/ Courts etc. should not be included in the pendency but their details should be given separately on a separate sheet so that these are not lost sight of .

3.3   The Assistant Commissioner will be held responsible to ensure that bonds for proper amount i.e., 3 times of the estimated differential duty are taken, in case of general bonds and that these are backed by proper (25%) security/ bank guarantee.

3.4   As regards bond with surety, the practice of two persons standing surety for each other must be stopped and in other cases solvency of the surety should be verified every year.

4.     Reports/ Information prescribed by DGICCE must be supplied with MTRs.

5.     The thrust should be on identifying and monitoring long pending issues. Also the cases involving amounts of over 1 Crore must be identified and pursued vigorously for being finalised in a time bound manner on a priority-basis by personal attention by the Commissioners.

ANNEXURE-I

Format of Provisional assessment Register to be maintained in Central Excise Divisional Office