THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 19012 of 2009 Dated: 10-11-2009 Between: M/s Pelican Rubber Limited, rep. by its Managing Director. …Petitioner and Central Board of Excise & Customs, North Block, New Delhi and others …Respondents Oral Order: (Per RR ,J) The petitioner a manufacturer of inner rubber tubes, which they claim are excisable goods classified under Chapter 40 of the First Schedule to the Central Excise Tariff Act, 1985 (for short ‘the Act’) as articles of rubber, was hitherto paying excise duty under Section 4 of the Act. The 1st respondent issued notification No.1/2006-CF dated 29-5-2006 stipulating that “parts, components and assemblies of automobiles” are to be assessed to Central Excise duty on the retail sale price under Section 4A of the Act. Thereafter, the Directorate General of Central Excise, Intelligence issued show-cause notice dated 21-7-2008 to the petitioner demanding payment of differential duty, on the manufactured rubber tubes on its MRP, on the ground that the said goods were parts of automobiles. The petitioner filed their objections, vide letter dated 22-1-2009, contending that the products manufactured by them did not fall under ‘parts of automobiles’, that these goods were rubber products classified under a different chapter, and that they were excluded from the purview of the expression ‘part’ and ‘parts and accessories’ of automobiles. While matters stood thus, the 1st respondent issued circular dated 16-12-2008 clarifying that inner tubes were to be treated as parts of automobiles. Though the petitioner had relied upon several Judgments in support of their contention that their goods did not fall under the category of parts of automobiles, the 2nd respondent i.e., the adjudicating authority passed Order-In-Original No. 16/2009-Cex dated 30-4-2009 holding that, in view of the Board Circular clarifying that the inner tubes are to be treated as parts of automobiles, he had no option other to confirm the demand. Aggrieved thereby, the petitioner preferred an appeal, in E/520/09, to the Customs, Central Excise and Service Tax Appellate Tribunal, (for short the ‘CESTAT’), Bangalore and filed an application seeking waiver of pre-deposit. The CESTAT, by its order dated 12-8- 2009, held:- “On careful consideration of the case records and submissions made by both sides, we find that the issue is highly contentious one. It can be argued that the applicant’s product would fall under Notification No.11/2006 and hence covered u/s 4A of the Central Excise Act, 1944 and it can be also argued that the specific chapter heading is not covered under notification issued under Section 4A. At this juncture, we are unable to come to a conclusion that whether applicant has made a case for complete waiver of pre-deposit. At the same time, we find that the applicant has deposited an amount of Rs.25lakhs during the proceedings before lower authorities. We consider this amount as enough deposit to hear the appeal. Accordingly, considering that there is a deposit of Rs.25 lakhs, application for waiver of balance amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.” The 2nd respondent had, hitherto, provisionally assessed the goods manufactured by the petitioner-company for a period of six months vide Order No. 946 dated 4-8-2008 from August, 2008 to January, 2009 subject to the condition the petitioner executed a bond and furnished Bank Guarantee towards the differential duty. The said period was extended further till 3-8-2009. The 3rd respondent, by his Assessment Order dated 23-3-2009, finalised the provisional assessment, which the petitioner claims to have been passed without putting them on notice and without affording them a personal hearing. The petitioner preferred an appeal thereagainst to the Commissioner of Appeals. The Commissioner, by order dated 26-6-2009, dismissed the said appeal. Against this order, the petitioner filed an appeal before the CESTAT, vide Appeal No. E/715/2009, which is said to be still pending. The petitioner requested the Chief Commissioner of Central Excise, Hyderabad, vide letter dated 20-7-2009, to extend the provisional assessment till the issue was settled by CESTAT. However, no reply is said to have been given thereto by the Chief Commissioner. Sri B.Adinarayana Rao, learned counsel for the petitioner, would submit that, since the Tribunal has no power to suspend all further proceedings and as its powers are limited only to the waiver of pre- deposit in the appeal filed before it, the petitioner is being forced to pay excise duty under Section 4A though they are liable to pay duty only under Section 4 of the Act. Learned counsel would submit that if the petitioner is not extended the benefit of the earlier provisional assessment, and permitted to pay duty under Section 4, till the appeal pending before the CESTAT is disposed of they would suffer irreparable injury as the disposal of the appeal by the CESTAT later may cripple them in the interregnum. Sri A.Rajashekar Reddy, learned Assistant Solicitor General would submit that, under Rule 7 (1) of the Central Excise Rules, 2002, once the provisional assessment has been finalised, there is no provision for permitting the petitioner to clear goods under provisional assessment thereafter and that, in the absence of any provision in the Act or the Rules in this regard, the petitioner’s claim to have the goods manufactured by it continued to be assessed on a provisional basis, necessitates rejection. While the submission of Sri B.Adinarayana Rao, learned counsel for the petitioner, that despite the interim order of the Tribunal, in E/Stay/359/2009 dated 12-8-2009, the petitioner is still required to pay duty under Section 4A of the Act for the subsequent years resulting in their suffering a huge financial burden, cannot be said to be without merit, in the absence of any specific provision under the Act and the Rules, the petitioner cannot be permitted to clear the manufactured goods on the basis of the earlier provisional assessment which has subsequently been finalised. Since we find that the petitioner’s grievance of financial injury is well conceived we consider it appropriate, in the circumstances, to direct the CESTAT, South Zonal Bench, FKCCI-WTC Building, K.G.Road, Bangalore-560 009 to dispose of both the appeals i.e., Appeal No.E/520/2009 and Appeal No. E/715/2009 within a period of two months from the date of receipt of a copy of this order. Let a copy of this order be communicated to the CESTAT, South Zonal Bench, FKCCI-WTC Building, K.G.Road, Bangalore-560 009 forthwith. The writ petition is, accordingly, disposed of. However, in the circumstances, without costs. _________________________ GODA RAGHURAM, J 10th November, 2009 _____________________________ RAMESH RANGANATHAN, J GRR