S K Petrochem Vs Commissioner of Customs (CESTAT Chandigarh)
The appeal before CESTAT Chandigarh challenged the order dated 28.03.2019 passed by the Commissioner of Customs, Ludhiana, concerning imports of “Rubber Processing Oil” made during the period from 13.09.2011 to 18.09.2012 through 15 Bills of Entry. The goods were declared under Customs Tariff Heading (CTH) 2710.1990 and were provisionally assessed under Section 18(1)(b) of the Customs Act, 1962. Subsequent test reports from Punjab Test House and CRCL indicated that the aromatic compound content exceeded 50%, leading the Department to consider reclassification under CTH 27079900.
A show cause notice dated 24.02.2016, along with a corrigendum dated 13.10.2016, was issued for finalisation of provisional assessments. An Order-in-Original dated 29.12.2017 confirmed a differential duty demand of approximately ₹45 lakhs. This order was upheld by the Commissioner (Appeals) on 29.12.2019.
The appellant contended that the finalisation of provisional assessment was time-barred, having been undertaken more than five years after the provisional assessments without any explanation for the delay. It was argued that CBEC instructions require provisional assessments to be finalised within six months and that, even in the absence of a statutory time limit under Section 18, assessments must be completed within a reasonable period. The appellant further argued that recovery of duty could only be made under Section 28 of the Act after finalisation of assessment and issuance of a show cause notice, which was not done in this case. It was also contended that the power to finalise provisional assessments was not expressly provided prior to the insertion of Section 18(1A) on 29.03.2018, which was not applicable to the period in question.
