Custom, Excise & Service Tax Tribunal
M/S Videocon International Ltd vs Commissioner Of Central Excise, ... on 30 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/2157 & 2200/03, E/3108/06 & E/CO/298/04 (Arising out of Order-in-Appeal No. BPS(135)423/2001 dated 12-5-2003 and RKR(109)103/2006 dated 21-7-2006 passed by the Commissioner of Central Excise (Appeals), Aurangabad). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Videocon International Ltd. Commissioner of Central Excise, Aurangabad Appellant Vs. Commissioner of Central Excise, Aurangabad M/s Videocon International Ltd. Respondent Appearance: Shri Gajendra Jain, Advocate for Appellant Shri K.M. Mondal for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 04.09.2013 Date of Decision: .2013 ORDER NO. Per: P.R. Chandrasekharan
There are 3 appeals, two filed by Revenue and one filed by the assessee, M/s Videocon International Ltd. (Videocon in short) directed against Orders-in-appeal No. BPS(135)423/2001 dated 12-5-2003 and RKR(109)103/2006 dated 21-7-2006 passed by the Commissioner of Central Excise (Appeals), Aurangabad.
2. These appeals were earlier considered by this Tribunal and this Tribunal vide Order No.A/352 to 355/2010/EB/C-II dated 4-11-2010 had allowed the Revenues appeals and dismissed the assessees appeal. Against the said decision of the Tribunal, Videocon filed appeals before the honble High Court of Bombay and the honble High Court vide Orders dated 22-3-2012 in Central Excise Appeal Nos. 88 and 91 of 2011 set aside the order of this Tribunal and remitted the matter back to the Tribunal for de novo consideration. In Central Excise Appeal No. 89 of 2011, the honble High Court dismissed the appeal of M/s Videocon in so far as it relates to rejection of their refund claim on account of time bar. While setting aside the order dated 4-11-2010, the honble High Court observed that the finding of the Tribunal that there was no evidence to show that the assessee had actually issued credit notes in respect of the duty burden initially passed on to its customers at the time of clearance of the goods is contrary to the fact recorded by the Commissioner of Central Excise (Appeals) who had recorded a finding that the refund has been allowed on the basis of the verification report submitted by the Range Superintendent wherein the said Superintendent on verification of the records recommended grant of the refund as claimed by the assessee.
3. The facts relevant to the case are as follows. M/s Videocon are manufacturers of Colour TVs and sell the same from their sales depots situated at various places. The assessee had filed price declarations under Rule 173C of the Central Excise Rules, 1944, declaring therein the assessable value of the goods cleared to its various depots from where the goods were sold to the dealers. At the time of finalization of its accounts for the year 1996-97, it was noticed that the assessee had claimed less deduction on account of the discounts passed on to its dealers, whereas it had actually passed on higher amount of discounts than those declared in the declarations filed with the department. Hence a revised price declaration was filed by the assessee on 17-6-97 claiming higher discounts retrospectively, i.e., with effect from October 1996 onwards. Consequently, the assessee filed 9 refund claims, 3 claims pertaining to the period October to December, 96 vide refund claims dated 21-7-97 and 22-8-97 and 6 refund claims pertaining to the period January 97 to June 97 vide refund claim dated 21-7-97. The refund claims for the period October to December 96 were rejected as time barred by the refund sanctioning authority, the lower appellate authority and this Tribunal and also by the Honble High Court of Bombay and hence is not a matter for consideration in the present appeal. As regards the refund claim for the period January 97 to June 97, the adjudicating authority held that an amount of Rs.12,12,613/- was time barred and the balance amount of Rs.1,07,98,905/- was rejected on the ground of unjust enrichment. On appeal, the lower appellate authority held that refund claim to the extent of Rs.1,07,98,905/- is not hit either by time bar or by the unjust enrichment clause. Thus the issue for consideration before us is whether the appellant is eligible for the refund of Rs.1,07,98,905/- and if so, whether they are also eligible for payment of interest thereon.
4. The contentions of the ld. Counsel for the Respondent can be summarized as follows:-
i) The depots were offering higher discounts for ex-depot sale when compared with discounts being offered for ex-factory sale and the factory was not aware of such higher discounts. There was a communication gap between the factory and the depots with respect to the exact discounts being offered and it took some time to adjust and this was the main reason for excess payment of excise duty for the period October 96 to June 97.
ii) The Respondents were regularly filing price declarations in terms of Rule 173C of the Central Excise Rules, 1944; however such declarations were not accurate in view of the fact that the factory was not aware of the exact amount of higher discounts being offered for ex-depot sale. Finally the Respondents filed revised price declarations on 21-6-97 revising the assessable value of the goods cleared to the depots during the period October 96 to June 97.
iii) The buyers who purchased CTVs from depots were aware through trade circulars of the exact amount of discounts to which they were eligible. The depot issued invoices considering lower discounts than those mutually agreed prior to clearance. The balance discount was passed on to the buyers by way of credit notes and the Respondents received amount which was net of credit note.
iv) If a view is taken that wherever credit note is issued, refund is hit by unjust enrichment, such a view would make section 12B redundant.
v) The honble Apex Court in the MRF case 1995 (77) ELT 433 (SC) and Bombay Tyre International case 1984 (17) ELT 329 (SC) had held that discounts known to prior to clearance but quantified subsequently were deductible from price to arrive at the taxable value.
vi) The honble Rajasthan High Court in the case of A.K. Spintex 2009 (234) ELT 41 (Raj.) had held that refund cannot be rejected if excess duty collected had been passed on to the buyers through credit notes. Similarly the honble Madras High Court in the case of Adison & Co. 2001 (129) ELT 44 (Mad) also held that if turnover discount is subsequently passed on through credit note, the provisions of unjust enrichment would not be attracted. This Tribunal in the case of IBP Ltd. 2013(288) ELT 385 had also followed the same ratio.
vii) The reliance placed by the Revenue in the case of S. Kumars, Grasim Industries Ltd. and Sangam Processors are not applicable to the facts of the present case as they are different and distinguishable. The contention of the Revenue that price lists cannot be revised retrospectively and therefore, the refund claim filed based on the revised price list is not admissible is incorrect and baseless.
viii) The Board vide circular dated 11-10-96 had clarified that that refund claim of duty paid in self assessment which is more than the duty payable as per law is admissible under section 11B of the Central Excise Act, 1944.
In the light of these submissions, it is prayed that refund claims which are not barred by limitation be allowed along with interest.
5. The ld. Special Consultant for the Revenue made the following submissions:
a) A larger Bench of this Tribunal in the case of S. Kumars Ltd. 2003 (153) ELT 217 considered a question whether post-clearance adjustment like issuance of credit notes or cheques by the assessee who is claiming refund to buyer of the goods would help the assessee to get over the bar of unjust enrichment under section 11B of the Central Excise Act and held that issuance of credit notes would not help the assessee to get over the bar of unjust enrichment following its earlier decision in the case of Sangam Processors (Bhilwara) Ltd. The same ratio was followed in Grasim Ind. (Chemical Divn.) case 2003 (153) ELT 694 by another Larger Bench of this Tribunal. This Tribunal in the case of Sangam Processors (Bhilwara) Ltd. case considered an issue wherein the assessee passed on the duty incidence to the customers at the time of clearance of the goods. Subsequently they issued credit notes in respect of the duty incidence to the customers and filed refund claim. This claim was rejected and the Tribunal upheld the rejection. The said decision was affirmed by the honble Apex Court.
b) The honble Apex Court in the case of Rainbow Industries (P) Ltd. 1994 (74) ELT 3 (SC) considered an issue whether revision of price declaration approved by department can be done retrospectively and held that such revision would be applicable only prospectively. Thus in the present case also the revision in the price declaration filed by M/s Videocon would be only prospective.
In the light of the above, it is pleaded that revision of prices subsequent to the removal of goods can apply only prospectively and passing of price reduction through credit notes cannot help in crossing the bar of unjust enrichment. Therefore, the refund claims ought to be rejected by setting aside the order of the lower appellate authority.
6. We have carefully considered the submissions made by both the sides. We have also gone through the records and the appeal memorandum and cross objections filed. Our findings and conclusions are enumerated in the ensuing paragraphs.
6.1 On going through the records, we find that there are several contradictions in the stand taken and the arguments advanced on behalf of M/s Videocon. It is the contention of the appellant that there was a communication gap between the factory and the sales depot about the quantum of discounts given on the goods sold from the depot. It has been submitted that the assessee gave higher discounts at the depot than what was declared in the price declaration and these discounts were known to the buyers in advance through trade circulars issued. If trade circulars were issued by the appellant with regard to admissible discounts, how can there be a communication gap between the factory and the depot resulting in declaration of lower discounts in the price declarations filed with the department? If permissible discounts were already known, where was the need to allow a lower discount at the time of sale of goods from the depot and subsequently pass on the differential discounts through credit notes? There are no satisfactory answers to any of these questions.
6.2 In their grounds of appeal in respect of appeal No.E/2200/03, the appellant M/s Videocon has stated as follows:-
A.1) The assessments for the period in question is to be treated as provisional.
A.2) The price declarations were filed initially by the appellants declaring the assessable value based on the prevailing price at the depot. The duty was paid by the appellant on this basis. However, subsequently, the appellants found that the goods were actually sold at a lesser price due to passing of higher discounts to the customers. Consequently a revised price declaration was filed by the appellants on 17-6-97, revising the assessable value for the period in question. 6.3 From these grounds adduced in the appeal memorandum, it is clear that the price initially declared to the department was the price prevalent at the depot at the time of removal of goods from the factory. This is further supported by the fact that this was the price at which the goods were sold to the dealers from the depot. Otherwise, there was no need to issue credit notes subsequent to the sale of the goods. It is an admitted position that the appellant allowed higher discounts in view of the cut throat competition in the colour TV market. If there was cut throat competition due to which the prices had to be reduced, how can it be known in advance so as to be communicated to the buyers in advance? The very fact that the reduction in price was passed on to the buyers subsequent to the sale through credit notes itself is a clear pointer to the fact such price reduction was not known in advance. No trade circulars communicating reduction in prices has been submitted by the appellant before this Tribunal nor copies of such circulars claimed to have been issued by the appellant is available on records. The only fact verifiable from the records is that the appellant had filed a price declaration at the time of removal of the goods from the factory indicating the prevailing price for the goods for sale at the depots. After a lapse of more than 9 months, the appellant filed a revised price list dated 17-6-97 revising the prices retrospectively from October 96 onwards. Thus the entire argument of the appellant that higher discounts allowed at the depot subsequent to the sale of the goods were known in advance is only an afterthought to claim ineligible refund and we hold accordingly.
6.4 The price declaration required to be filed by the assessee with the department under Rule 173C is an advance declaration as is evident from the provisions of the said Rule.
173C. Procedure regarding valuation of goods assessable ad valorem.- (1) Every assessee who produces, manufactures or warehouses goods which are chargeable with duty at a rate dependent on the value of the goods and removes or clears such goods as provided in rules 9, 49, 144, 152 and 157, shall declare the value under section 4 of the Act of such goods in the documents such as sales invoice, invoice-cum-challan or like documents used by him for sale or removal of goods .
Provided that
(i) such documents shall indicate separately the value of goods under section 4 of the Act and the duty paid as provided under section 12A of the Act;
(ii) that such documents also contain a declaration of the price;
(iii) that such documents also indicate, wherever applicable, individually the central excise duty, other taxes, all discounts and other consideration if any, for the difference between the price and the value of the goods under section 4 of the Act;
(iv) that such documents also indicate the date and time of removal of the goods:
Provided further that where an assessee,
(i) sells goods to or through related persons as defined in section 4 of the Act; or
(ii) uses such goods for manufacture or production of other goods in his factory; or
(iii) removes such goods for free distribution; or
(iv) removes such goods in any other manner which does not involve sale; or
(v) removes goods of the same kind and quality from his factories located in the jurisdiction of different Commissioners of Central Excise or Assistant Commissioners of Central Excise or Deputy Commissioner of Central Excise he shall file, with the proper officer a declaration, in such form and in such manner and at such interval as the Central Board of Excise and Customs or Commissioner of Central Excise may require, declaring the value of the goods under section 4 of the Act, the duty and other elements constituting the price of such goods along with such other particulars as the Central Board of Excise and Customs or the Commissioner of Central Excise may specify.
(2) The assessee shall certify in each such document that the amount indicated in such document represents the price actually charged by him and that there is no additional consideration flowing directly or indirectly from such sales over and above what has been declared.
(2A) Every assessee who produces, manufactures or warehouses goods notified under Section 4A of the Act shall file with the proper officer a declaration in such form and in such manner and at such interval as the Central Board of Excise and Customs may specify, declaring the retail sale price of such goods, amount of abatement, if any on such sale price and such other particulars as may be specified by the said Board.
(3) The proper officer, duly empowered by the Central Government under section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration made in the documents referred to in sub-rule (1) or sub-rule (2A) by an assessee,
(a) require any person to produce or deliver any document or thing relevant to the enquiry ; and
(b) examine any person acquainted with the facts and circumstances of the particulars declared in such documents or other records, in the manner provided in section 14 of the Act.
(3A) The assessee shall declare to the proper officer his marketing pattern, discount structure and such other particulars in such form and in such manner and at such intervals as the Central Board of Excise and Customs or Commissioner of Central Excise may require.
(4) The proper officer may after such further enquiry as he may consider, reassess following the provisions of section 11A of the Act and the assessee shall pay the deficiency, if any. From the above, it is amply clear that the rule envisages the price declaration along with duty particulars in each sale/removal document specified under the law. If this statutory requirement has to be complied with, the price should be known in advance. If for any reason, the assessee is not able to declare the price, he has to opt for provisional assessment of duty in terms of Rule 9B of the said Rules as extracted below:-
9B. Provisional assessment to duty.- (1) Notwithstanding anything contained in these rules,
(a) where the assessee is unable to determine the value of excisable goods in terms of section 4 of the Act on account of non-availability of any document or information; or
(b) where the assessee is unable to determine the correct classification of the goods while filing the declaration under rule 173B;
the said assessee may request the proper officer in writing giving the reasons for provisional assessment to duty, and the proper officer may direct after such inquiry as he deems fit, that the duty leviable on such goods shall be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of difference between the amount of duty as provisionally assessed and as finally assessed: It is not the case of the appellant before us that they opted for provisional assessment under Rule 9B in the instant case.
6.5 From the above statutory provisions, it can be seen that declaration of correct price under Rule 173C was not an empty formality but a statutory requirement to be conformed and complied with by every assessee.
6.6 It is a settled position in law as held in Rainbow Industries case cited supra that revision of price list/declaration can be effective only prospectively. Applying the ratio of the said decision to the facts of the present case, the revised price declaration filed by the appellant indicating a higher discount can only be effective from its date of filing, that is, 17-6-1997 and cannot be applied retrospectively from October 96 onwards.
6.7 An argument has been made that price declaration under Rule 173C has nothing to do with the grant of refund under section 11B of the Central Excise Act and if duty has been paid in excess, then refund has to be granted. This argument advanced on behalf of the appellant is totally incorrect. Refund of duty under section 11B pre-supposes the determination of the correct amount of duty liable to be paid. That determination of the correct duty liability is dependent on the correct valuation of the goods where the rate of duty is ad valorem. It is for the correct determination of value, Rule 173C provides for declaration of value. Sub-rule (4) of the said Rule provides that the proper officer may after such further enquiry as he may consider, reassess following the provisions of section 11A of the Act and the assessee shall pay the deficiency, if any. In other words, if there is any deficiency in duty payment or excess in duty payment, the same has to be determined in terms of the declaration made by the assessee under Rule 173C. Therefore, the provisions of the said Rule are very much relevant and integral to the consideration of any refund claim, as it stood at the relevant point of time.
6.8 Now let us see how far the ratio of the decisions of various High Courts relied upon by the assessee M/s Videocon apply to the facts of the present case. Reliance has been placed on the decision of the honble High Court of Madras in the Adison & Co. cited supra. In the said case, the question for consideration was refund of turnover discount which was allowed by the lower authorities. However, this Tribunal disallowed the claim on the ground that it had not been established by the assessee that the burden of the duty paid by it initially had not been passed on to the consumer and there was no evidence whatsoever before the authority or the Tribunal as to the price at which the goods were sold by the dealer who had bought the same from the manufacturer and from which it could be inferred that the ultimate buyer had been asked to bear the burden of the full extent of the duty initially paid by the manufacturer. The honble High Court held that the language in section 11B is not capable of being construed as having reference to the ultimate consumer of the product. What has to be demonstrated by the claimant is that the burden of the duty paid had not been passed on by him to any other person. The passing on will occur only if the person who claims refund of duty has shifted the burden to another. There can be no passing on of the incidence of duty if he merely reduces his burden by receiving the refund. Accordingly it was held that the Tribunal was in error in holding that the assessee having proved that it had not passed on the incidence of duty to its buyers, it was not entitled to refund even when all the other conditions required to be satisfied under section 11B had been satisfied. The issue before us in the present case is completely different. The question before us is whether passing of credit notes subsequent to the sale of goods where duty incidence had been passed on would amount to not passing on of the duty incidence or not. Further, the said decision of the honble High Court has been challenged by the Revenue before the honble Apex Court by way of SLP and leave has been granted by the honble Apex Court as reported in Commissioner v. Addison & Co. -2003(152) ELT A94 (SC). It is a settled position in law that once an appeal has been admitted by the honble Apex Court against a decision of the Tribunal or High Court, then the said decision is in jeopardy and cannot form a precedence as held by the honble Apex Court in UOI v. West Coast Paper Mills Ltd. 2004-TIOL-14-SC-LMT-LB as stated in paragraph 38 of the said judgment as extracted below:-
38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit. Thus it is improper and premature to rely on the decision of the honble Madras High Court in the Adison & Co. case cited supra at this stage.
6.9 As regards the reliance placed on the decision of the honble Rajasthan High Court in the A.K. Spintex case, the said decision follows the ratio of the decision of the honble Madras High Court in the Adison & Co. case. It appears that it was not brought to the notice of the honble High Court that the Apex Court had already admitted Revenues SLP in the Adison &Co. case and the said decision is in jeopardy. Therefore, the decision in the A.K. Spintex case has to be considered as per in curiam. Further, the facts involved in the said case were totally different and distinguishable from those involved in the present appeals before us as discussed herein. M/s A.K. Spintex was a processor of fabrics and in terms of notification dated 1-3-01, they got deemed cenvat credit in respect of declared inputs @ 45% of the duty paid on processed fabrics. On 11-6-01,vide notification 25/2001-CE, the rate of deemed credit was enhanced to 50%; however, the assessee continued to make clearance of the processed fabric on payment of 55% duty instead of 50% upto 13-6-01 (that is for 3 days). However, the customers, aware of the changes in the rates, protested against the charge of duty @55% and immediately issued debit notes to the assessee with a view to take credit of the differential amount of duty. Accordingly the assessee filed a refund claim of duty in the sum of Rs.61,146/- contending that this amount has neither been realized from the customers nor the duty has been passed on to the customers. The application was rejected on the ground that the duty liability was passed on to the customers and subsequent credit notes issued to the customers do not make the bar of unjust enrichment inapplicable. It was in that context it was held by the honble Rajasthan High Court that once the assessee leads a reliable evidence, the presumption enacted by sec. 12B stands sufficiently rebutted and can not survive ad infinitum. In the case before us, the facts are completely different. Here the payment of duty at higher amounts were made by the buyers and the assessee sought to retrospectively amend the prices declared after a gap of about 9 months and pass on the price differential through credit notes. Thus the facts are completely different than that involved in the A.K. Spintex case cited supra and therefore, the ratio of the said decision cannot apply.
6.10 It is a settled position in law that the ratio of any decision must be understood in the background of the facts of that case and a case is only an authority for what it actually decides, and not what logically follows from it and a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. In Bharat Petroleum Corporation Ltd. & another v. N.R. Vairamani & another - AIR 2004 SC 4778, it was held that a decision cannot be relied on without disclosing the factual situation. In the same judgment it was held as under:
Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclids theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgment of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgment. They interpret words of statutes; their words are not to be interpreted as statutes.
The Honble Supreme Court in the case of Alnoori Tobacco Products 2004 (170) ELT 135 (SC) observed that:
13.?Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper.
14.?The following words of Lord Denning in the matter of applying precedents have become locus classicus :
Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. ??***????????***?????????????*** Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it. 6.11 The IBP Ltd. case relied upon by the assessee relies on the decision of the High Courts in the Adison & Co. case and the A.K. Spintex case. In the preceding paragraphs, it has already been discussed as to how these decisions are not applicable to the facts of the present case. Therefore, this decision of the Tribunal also has no relevance.
6.12 In the Sangam Processors (Bhilwara) Ltd. case, this Tribunal considered a case of refund of excise duty. In the said case, the assessee paid duty on processed fabrics at higher rates by classifying the goods under CETH 55.08 of the Tariff during 1-3-86 to 12-5-86 and passed on the duty incidence to its buyers. Subsequently, the duty rates were reduced and a notification was issued under section 11C of the Central Excise Act waiving the requirement of paying higher duty during 1-3-86 to 12-5-86 was issued on 21-12-88 because of the fact that as a general practice, lower duty had been collected during that period. The assessee issued credit notes to the buyers passing on the benefit of duty reduction and claimed refund of the higher duty paid. It was held that refund would not be admissible even though credit notes had been issued to the buyers passing on the benefit of duty reduction. The said decision was affirmed by the honble Apex Court.
6.13 Subsequently a question arose for consideration before a Larger Bench of this Tribunal in S. Kumars Ltd. case as to whether post-clearance adjustment like issuance of credit notes or cheques by the assessee who is claiming refund to the buyer of the goods, taking the burden of duty on the goods would help the assessee to get over the bar of unjust enrichment under section 11B of the Central Excise Act. It was held by this Tribunal that subsequent issue of credit notes will not help in overcoming the bar of unjust enrichment. The same issue again arose for consideration in the Grasim Ind.(Chemical Division) case and another Larger Bench of this Tribunal following the decision in the Sangam Processors case confirmed the same view. In Grasim Industries Ltd. Vs. CCE, Bhopal 2011 (271) ELT 164 (SC) a similar question arose where credit note were issued for return of duty tow years after clearance and the honble Apex Court held that credit notes issued for return of duty cannot be relied upon and accepted as a reliable document. In view of the above, the settled position in law is that subsequent issue of credit notes passing on relief of duty burden would not help in overcoming the bar of unjust enrichment.
6.14 A similar issue came up for consideration before a Larger Bench of the honble Apex Court in MRF Ltd. vs. CCE, Madras [1997 (92) ELT 309 (SC)].In that case, the Madras Bench of this Tribunal considered a claim of refund of excise duty on the differential between the price on the date of removal and the reduced price at which the tyres were sold on the direction of the Government of India. The Tribunal came to the conclusion that under Rule 9A and Rule 173C of the Central Excise Rules, duty was chargeable on the excisable goods at the rate and on the price prevailing on the date of actual removal and the subsequent reduction in the price for whatever reason was totally irrelevant so far as the liability to pay excise duty was concerned and therefore, the refund claim could not be entertained. The matter went up to Supreme Court and the Apex Court held as follows:-
Once the assessee has cleared the goods on the classification and price indicated by him at the time of removal of the goods from the factory gate, the assessee becomes liable to payment of duty on that date and time and subsequent reduction in prices for whatever reason cannot a matter of concern to the Central Excise Department as the liability to payment of excise was concerned. This is the view taken by the Tribunal in the case of Indo Hacks Ltd. v. Collector of Central Excise, Hyderabad [1986 (25) ELT 69 (Tribunal)] and it seems to us that the Tribunals view that the duty is chargeable at the rate and price when the commodity is cleared at the factory gate and not on the price reduced at a subsequent date is unexceptionable. Besides, as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever as the liability to pay excise duty is concerned. 6.15 If one applies the ratio of this decision to the facts of the present case, the subsequent reduction in prices by passing on higher discounts to the customers after the clearance of the goods cannot alter the excise duty liability of the appellant M/s Videocon. This decision of the honble Apex Court was never brought to the notice of the Rajasthan High Court and the Madras High Court at the time of consideration of A.K. Spintex case and Adison & Co. case.
7. In view of the foregoing discussion, we allow the appeals filed by Revenue and reject the refund claim along with interest thereon of the assessee, M/s Videocon International Ltd.
(Order pronounced in the Court on / /2013)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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