Customs, Excise and Gold Tribunal - Bangalore
Nagarjuna Construction Co. Ltd. vs Commr. Of C. Ex. on 15 February, 2006
ORDER T.K. Jayaraman, Member (T)
1. These appeals have been filed against Orders-in-Appeal 46 and 47/2003(H-I) C.E., dated 30-4-2003 passed by the CCE (Appeals), Hyderabad. The short point is whether the appellants are entitled to refund of the excise duty paid on the gas cylinders cleared by them on account of reduction of price of the cylinders by the oil companies to whom they sold the cylinders. The Original Authority rejected the refund claims on account of time bar. The appellants contended before the Commissioner (Appeals) that as per the terms of the supplying order agreed upon between the parties, the prices of the cylinder were provisional. They had informed the superintendent stating that the goods cleared to oil companies are on the basis of provisional prices. In their monthly RT 12 returns, they had indicated the fact of provisional assessment. The only lapse is that they had not furnished the bond under Rule 9B. The lower appellate authority held that the appellants did not follow the procedure laid down under Rule 9B. Relying on the following decisions of the Tribunal, the appellate authority rejected the appeals of the appellants.
(1) Rajiv Mardia v. CCE, Indore (2) Hindustan Wires Ltd. v. CCE, Delhi
2. Shri Jai Kumar, the learned Advocate appeared for the appellants and Shri K.S. Bhat, learned SDR for the revenue.
3. The learned Advocate urged the following points.
(1) The appellants manufacture LPG gas cylinders and sells the same to various public sector enterprises. The Purchase orders would indicate that the prices quoted are only provisional. Subsequently, the prices would be finalized with retrospective effect. In case of any upward revision of price, the appellants would be paying differential duty and in the case of any downward revision, the appellants would be claiming refund of excess duty paid. Since the assessment should be considered as provisional, there is no question of time bar.
(2) The learned Advocate relied on the Tribunal's decision in Indian Aluminium Cables v. CCE wherein it has been held that in case of retrospective price reduction the appellant is not precluded from claiming refund as in such cases, the approval granted to the price list is only provisional. As such, the claims are not hit by time bar. In the above decision, the Tribunal has relied on Bombay High Court's decision in the case of Premier Automobiles Ltd v. UOI and Ors.
(3) Further the learned Advocate relied on the following case laws wherein it has been held that if a price escalation clause exists in an agreement the assessment has to be considered as provisional and the time bar is not applicable to demand as well as refund.
(1) Pre-stressed concrete Poles v. CCE (2) Asiatic Oxygen & Acetylene Co. Ltd. v. CCE (3) Indo Floodgates Ltd. v. CCE 2001 (135) E.L.T. 619 (Tri.) (4) Orient Pre-stressed Products (P) Ltd. v. CCE (4) The case laws relied on by the Department were distinguished by the learned Advocate emphasizing the point that in those cases there were no instances of price variation clause and therefore, the ratio of the above decisions are not applicable.
The learned SDR reiterated the Orders of the lower authorities.
4. We have gone through the records of the case carefully. The appellants in their letter dated 17-7-2000 addressed to the jurisdictional superintendent of central excise have indicated that they are clearing the goods basing on the provisional price given by the oil companies and as such, submitting the monthly returns by assessing on the basis of provisional prices. It was further pointed out that when there is revision in prices, they are paying differential duty. In their letter they have also indicated the differential duty paid by them on account of revision in prices. Since, the appellants have informed the department that the prices are provisional and the agreements with the oil companies also indicate that the prices are subject to revision with retrospective effect, we have to treat the assessment as provisional and the time bar would not be applicable. All the case laws relied on by the appellants are very relevant. When the department does not have any hesitation in receiving the differential duty on account of upward revision of prices, they cannot take a different stand and reject the refund claim when there is downward revision on the ground that the assessments are final and the demands are time barred. Since the appellants have informed the department of the fact of price variation in all these cases, the assessments on RT-12 should be deemed to be provisional and therefore, the time bar would not be applicable. The fact that no bond was executed under Rule 9B should not stand in the way of treating the assessment as provisional. In the result, we allow the appeals with consequential relief. v (Pronounced in open Court on 15-2-2006)