SERAI KELLA GLASS WORKS PVT. LTD. versus COLLECTOR OF CENTRAL EXCISE, PATNA

Citation: [1997] 3 S.C.R. 700 · Decided: 08-04-1997 · Supreme Court of India · Bench: S.C. SEN, K.T. THOMAS · Disposal: Dismissed

Judgment (excerpt)

A 
SERA! KELLA GLASS WORKS PVT. LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, PATNA 
APRIL 8, 1997 
B 
[SUHAS C. SEN AND K.T. THOMAS, JJ.) 
Central Excises and Salt Act, 1944 : Sections 4 and 11-A. 
Excise Duty-Differential Duty-Levy of-Provisional assessment made 
C by proper officer without issuing show cause notice-Quashed by High Coult 
with a directio11 for re-detennination of post-ma11uf acturi11g expenses a11d 
exclusio11 thereof from the assessable value-Held : Provisio11 for issue of 
show cause 11otice not applicable-Proper officer required to proceed under 
S.4 and R.173-1 -Central Excise Rules, 1944, Rr. 173- F, 173-I and 9-B. 
D 
The appellant manufactured sheet glass and filed price lists and 
paid duty according to their calculations. The Assistant Collector of 
Central Excise, after issuing show cause notices, directed the appellant to 
follow the provisional assessment procedure prescribed under Rule 9-B of 
the Central Excise Rules, 1944 for further clearances. Thereafter, the 
, E Assistant Collector modified the price list filed by the appellant and 
disallowed all the deductions claimed by it except for trade discounts. 
F 
The High Court quashed the order passed by the Assistant Collector 
disallowing the appellant's claim for deductions and also the direction for 
provisional clearance on furnishing of bond. 
The High Court, however, remanded the case back to the Assistant 
Collector to ascertain the element which would constitute post-manufac-
turing expenses which according to the High Court could not be included 
in the assessable value. Subsequently, after issuing show cause notice the 
G Assistant Collector rejected the appellant's claim to deductions and by two 
separate orders demanded the differential duty. 
The appellant's contention that the said two orders was not proceded 
by any show cause notice under Section 11-A of the Central Excises and 
Salt Act, 1944 and hence these two orders were void ab initio was rejected 
H by the Assistant Collector. The Customs, Excise and Gold (Con.trol) 
700 
SERA! KELIA GLASS WORKS (P) LIB. v. COLLECTOR OF CENTRAL EXCISE 
701 
Appellate Tribunal dismissed the appeal. Being aggrieved the appellant A 
preferred the present appeal. 
Dismissing the appeal, this Court 
HELD : 1.1. In the instant case, the High Court after quashing the 
provisional assessment, directed the assessments to be made afresh in B 
accordance with the guidelines given by it. The provisional assessment was 
quashed by the High Court and direction was given to re-compute the value 
of the excisable goods. This could only be done in accordance with the 
substantive provisions of Section 4 and in accordance with the procedure 
laid dowu in Rule 173-1 of the Central Excise Rules, 1944. [706-C-E) 
C 
1.2. The assessee is entitled under Rule 173-F of the Rules to deter-
mine his liability for duty on the excisable goods manufactured by him and 
to remove such goods on payment of duty on self assessment iu accordance 
with the provisions laid down in the Rules. But this is only the first step 
in making of the assessment under Rule 173-F by the proper officer. After D 
final assessment, a copy of the order on the return filed by the assessee 
has to be sent to him. Duty has to be paid by the assessee on the basis of 
final assessment within 10 days time from the receipt of the return. No 
question of giving any notice under Section 11-A arises in such a case. It 
is only when even after final assessment and payment of duties, it is found E 
that there has been a short-levy of duty, the Excise Officer is empowered 
to take proceedings under Section 11-A within the period of limitation after 
issuing a show cause notice. In such a case, limitation period will run from 
the date of the final assessment. The scope of Section 11-A and Rule 173-1 
are quite different. [707-A-B; F-H) 
1.3. In the instant case, the provisional assessment earlier made by 
the proper officer has been quashed and pursuant to the direction of the 
High Court, the proper officer has made the final assessment. No question 
of failure of issuance of show cause notice under Section 11-A arises in 
this case. [707-H; 708-A-B] 
Union of India v. Madhumilan Syntax Pvt. Ltd. & Anr., [1988) 3 SCC 
348 and CCE v. Kosan Metal Products Ltd., [1989) Supp. 1SCC135, held 
inapplicable. 
F 
G 
Union of India v. Bombay Tyres International Ltd. & Ors., [1983) 4 H 
702 
SUPREME COURT REPORTS 
[1997] 3 S.C.R. 
A SCC 210, Gokak Patel Vo/kart

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