Custom, Excise & Service Tax Tribunal
M/S Ptc Industries Limited vs Cce, Jaipur-I on 27 July, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi. Date of hearing: 01.07.2016 Date of decision: 27.07.2016 For Approval and Signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Excise Appeal Nos. 2009 to 2011 of 2008 (Arising out of the Order in appeal No. 152 154 (RKS) CE/JPR-I/2008 dated 06.06.2008 passed by the Commissioner (Appeals-I), Customs & Central Excise, Jaipur). M/s PTC Industries Limited Appellant Vs. CCE, Jaipur-I Respondent
Appearance:
Sh. B. L. Yadav, Consultant for the appellant Sh. R. K. Manjhi, DR for the respondent Coram:
Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) Final Order Nos. 52650 52625 / 2016 Per: Archana Wadhwa:
As per facts on record the appellants who are engaged in the manufacture of steel casting falling under Chapter Heading 73.25 of the first schedule of Central Excise Tariff Act, 1985 entered into rate contract with M/s Northern Coalfields Limited, Singrauli. As per one of the clauses of the said rate contract, the price entered between the two were not final and was subject to price variation clause based upon RBI index.
2. During the period relevant for the purposes of the present appeal the appellant cleared their final product at the agreed upon price, after payment of duty leviable thereon. However, subsequently in terms of the price variation clause in the rate contract, the value of the goods was brought down and the excess duty paid by the appellant was refunded to their customers by way of making adjustment in the subsequent bills. Simultaneously, the appellant also filed three refund claims for the period February 2006 to November, 2006 seeking refund of excess duty paid by them to the extent of Rs.15,308/-; Rs.1,67,207/- and Rs. 68,440/-.
3. Proceedings were initiated against the appellant by way of issuance of the show cause notice proposing to reject the said claims on the ground that the duty once having been paid by the assessee cannot be refunded by way of subsequent claims made by the assessee, when they have not opted for provisional assessment during the relevant period. Accordingly, the original adjudicating authority rejected the refund claim totally amounting to Rs.1,67,207/- by observing that once the assessee has paid duty at the time of clearance under final assessment, subsequent reduction of price due to any reason cannot be adopted for seeking refund.
4. On an appeal against the said order, Commissioner (Appeals) rejected the same and observed that having paid the excess duty and having collected the same from their customer, even though adjusted in subsequent bills, the provision of unjust enrichment would apply. He accordingly rejected the appeal. Hence the present appeal.
5. Ld. Advocate for the appellant has drawn our attention to various decisions laying down that if there subsequent reduction in the price, which in turn is based upon the price variation clause in the rate contract, the assessment has to be considered as provisional. Non observance of procedure under Rule 7 of Central Excise Rules, 2004 will not render the assessment as final assessment and refund can be granted in such a situation. Reference stands made to the decision of the Tribunal in the case of Sankhla Udyog vs. CCE, Jaipur-II 2014 (314) ELT 350 (Tri. Del.), K.J.V. Alloys Conductors P. Ltd. vs. CCE, Hyderabad 2012 (275) ELT 90 (Tri. Bang.), CCE, Raipur vs. IBP Ltd. 2013 (288) ELT 385 (Tri. Del.) and in the case of CC&CE, Hyderabad-III vs. Premier Explosives Ltd. 2008 (226) ELT 729 (Tri. Bang.).
6. As regards unjust enrichment its stands observed in the same very decisions of the Tribunal that where the excess duty initially collected stands paid back to the customer by way of issuance of credit note or by adjustments in the subsequent bills, principles of unjust enrichment become inapplicable, thus entitling the assessee to claim refund. This was specifically observed so in the decision of the Tribunal in the case of IBP Ltd. referred (supra). To the same effect is another decision of the Tribunal in the case of Karnataka Vidyuth Karkhane Ltd. vs. CCE&ST, Bangalore-II 2015 (327) ELT 658 (Tri. Bang.) and Bharat BIjlee Ltd. vs. CCE, Belapur 2010 (262) ELT 369 (Tri. Mumbai).
7. As against the above decisions, ld. DR for the appellant relied upon the Tribunals decision in the case of Munjal Auto Industries vs. CCE&ST, Vadodara 2014 (307) ELT 577 (Tri. Ahmd.), wherein it was observed that price revised downward at a later date subsequent to clearance of goods from the appellants factory without observing the provisions of Rule 7 relating to provisional assessment, cannot result in refund of duty excess paid at the time of original clearance. Reference also stands made to the Honble Supreme Court decision in the case of MRF Ltd., vs. CCE, Madras 1997 (92) ELT 309 (SC).
8. However, we find that the said decision of the Honble Supreme Court in the case of MRF Ltd. (supra) is distinguishable inasmuch as in that case its stand clearly observed by the Honble Supreme Court that there was no contract between the parties. As regards the price variation clause and the appellant have not placed anything on record to show that there existed any agreement between the appellant and their buyers evidencing that the prices were provisional. Similarly, in the case of Munjal Auto Industries (supra) there was no price variation clause in the agreement. It was in these circumstances, the Tribunal observed that in the absence of provisional assessment, the subsequent reduction in prices will not have the effect of lowering the assessable value and thus refunding the excess duty paid.
9. We note that the decisions relied upon by ld. Advocate for the appellant clearly cover the issue involved and stands given in the same set of facts and circumstances. Accordingly, by following the same, we set-aside the impugned order and allow all the three appeals with consequential relief to the appellants.
(Pronounced on 27.07.2016).
(Archana Wadhwa) Member (Judicial) (V. Padmanabhan) Member (Technical) Pant