In such cases the assessee may request the central excise officer for provisional assessment of duty. However, a prescribed procedure is to be followed by the assessee and the departmental authorities. This includes(a) the assessee's request should be in writing giving the reasons for provisional assessment;(b) the central excise officer is to indicate the rate of duty or the value, as the case may be, at which the assessee is to pay duty during the period of provisional assessment, and(c) the assessee may have to execute a bond, with surety for sufficient security, of such amount that the officer may deem fit for payment of difference between the duty provisionally assessed and as may be finally assessed.

Though the procedure for provisional assessment of duty is clearly spelt out in rule 9B of the central excise rules, efforts are made at times to obtain the benefit of provisional assessment even when the prescribed procedure is not followed. A recent illustration is a case in point.

A manufacturer of chemicals claimed classification of their product under chapter 34 of the excise tariff. The classification list was initially approved provisionally for want of chemical test report.

However, the procedure prescribed under rule 9B was not followed.On receipt of the chemical examiner's report, the assistant commissioner approved the classification under Chapter 38 and not under Chapter 34. The assessee disputed this. However, on appeal, the assistant collector's order was confirmed by collector (appeals). Thereafter, the range superintendent issued notices demanding the differential duty.

The assessee ventured to rely upon some case laws in support of its claim but in vain.The assessee also argued that the demand notices were improper when the matter was pending finalisation with the assistant collector and also when the monthly returns were pending acceptance. They also resisted the imposition of any penalty.

The assistant collector confirmed the demand for duty and rejected the claim for classification under Chapter 34. However, in the circumstances of the case, he refrained from imposing penalty as he felt that the assessee did not suppress the facts in the classification list that was filed with the department.

The assessee then appealed to the collector (appeals) who rejected its first appeal. She observed: "I find that the assessment was not provisional under rule 9B. The notices in the instant case were issued prior to finalisation of (RT12) returns or finalisation of classification list primarily to prevent such demands from becoming time barred. The demands were confirmed by the assistant collector on the basis of the classification approved by him and upheld by collector (appeals)."

In the second appeal before the tribunal, the assessee still insisted upon his contention. It was argued that the demands were issued even before the finalisation of classification lists and the assessments were to be treated as provisional. The assessee also challenged the authority of the range superintendent to issue the demands, relying upon certain decisions of the tribunal and also judgements of the high court. The tribunal, however, was not impressed by the assessee's arguments. It was also not convinced that any of the judgements referred to in support of its claim by the appellant applied in this case. The tribunal's verdict provides the logic of its conclusion in clear terms.

"It is (an accepted) position that against the provisional approval of the classification list, no bond as required under rule 9B were executed and the procedure prescribed for provisional assessment was not followed. Rule 173B provides for provisional assessment provided the procedure provided under rule 9B was followed. Once the procedure prescribed for provisional assessment has not been complied with, the assessments cannot be said to be provisional."

Statutory legal provisions govern the implementation of any tax law. While the amount of tax liability is determined by the statutory rates, in several cases the claims for special benefits, exemption and reliefs are essentially based on procedures. Yet, at times the taxpayers claim for the benefit of lower tax liability or reliefs, giving casual treatment to the requirement of following the procedure.

When the authorities are not inclined to oblige a standard argument is strenuously pressed into service, namely, the right accrued through substantive provision of law must over ride the procedure. The departmental officials are severely criticised for holding on to a narrow approach. Malice or motive is an oft-repeated allegation hurled upon them.

Surely, there are plenty of examples. To take only one, till recently, the scheme of modvat credit was infested with several procedural obligations like filing of declaration of inputs, using the duplicate copy of invoice for taking credits, etc. In numerous cases the failure to comply with these requirements was not considered as hindrance to the claim for modvat credit. Large number of appeals of the department were summarily rejected.

However, a larger bench of the tribunal held that if the law provided credit on the strength of duplicate copy of the invoice, the requirement was mandatory. This overruled the view prevailing earlier for long. For the department, the decision is important but far too late.

It now seems that the line of distinction between substantive provision of law and the procedure as a subject matter of debate is getting thinner. The assessees are, therefore, well advised to follow the procedures provided under the law. Failure to do so may mean risk perhaps not worth taking.