Custom, Excise & Service Tax Tribunal
M/S. Gulf Oil Corpn. Ltd vs Cce, Ranchi on 5 August, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Ex.Ap.09/09
(Arising out of Order-in-Appeal No. 44/RAN/2008 dated 30.09.2008 passed by the Commissioner(Appeals) of Central Excise & Service Tax, Ranchi.)
FOR APPROVAL AND SIGNATURE
HON'BLE SHRI S.S. KANG, VICE PRESIDENT
1. Whether Press Reporters may be allowed to see
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
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Gulf Oil Corpn. Ltd.
Applicant (s)/Appellant (s)
Vs.
CCE, Ranchi
Respondent (s)
Appearance:
Shri S.C. Mohanty, Advocate for the Appellant (s) Shri B.B. Agarwal, Authorized Representative (Jt.CDR) for the Revenue CORAM:
Hon'ble Shri S.S.Kang, Vice President Date of Hearing/Decision :- 05.08.2009 Date of Pronouncement :- 05.08.2009 ORDER NO............................................................................
Per Shri S.S.Kang.
1. Heard both sides.
2. Appellant filed this Appeal against the impugned order whereby a portion of refund claim of the Appellant was rejected as time barred as well as on the ground of unjust enrichment.
3. The contention of Appellant is that as per the price variation clause in the contract the goods were cleared on payment of appropriate duty and subsequently the prices were finalized and it is agreed between the parties to reduce the prices therefore the Appellant filed the refund claims after taking into consideration the reduced prices in respect of the excise duty paid in excess. The contention is that as there is variation clause in the agreement under which the goods were supplied and subsequently prices were finalized and the price and duty element was adjusted by issuing the credit notes therefore it cannot be said that burden of duty has been passed on. Appellant relied upon a certificate given by their customers dated 10.12.2002 in this regard. Appellant relied upon the following decisions:-
1) Universal Cylinders Ltd. vs. CCE, Jaipur-I 2004 (178) ELT 898 (Tri.-Del.)
2) Rajasthan Electronics & Instruments Ltd. vs. CCE, Jaipur 2006 (75) RLT 111 (CESTAT-Del.)
3) UOI vs. A.K. Spintex Ltd.
2009 (234) ELT 41 (Raj.)
4. Appellant also relied upon the decision of the Tribunal in their own case i.e. final Order No.A-75/KOL/2003 dated 29.01.2003 where the Tribunal held that Appellant's failure to seek provisional assessment will not take away the right to file refund claim under Section 11B specially when the Appellant received only the reduced prices from their customers.
5. The contention of the Appellant is that in the above decisions the Tribunal allowed the refund where the contract contains price variation clause on the ground that the principles of unjust enrichment are not applicable. In the present case also as the prices were subsequently reduced and the price and duty element was adjusted by issuing credit notes therefore the burden of duty has not been passed on to the customers.
6. Learned Jt.CDR appearing on behalf of the Revenue submitted that the issue whether the subsequent issuance of credit notes will help the case of assessee in respect of unjust enrichment is now settled by the following larger Bench decisions of the Tribunal.
1) S.Kumar's Ltd. vs. CCE, Indore 2003 (153) E.L.T. 217 (Tri.- LB)
2) Grasim Ind. (Chemical Divn.) vs. CCE, Bhopal 2003 (153) E.L.T. 694 (Tri.- LB)
7. The contention is that in above cases the larger Bench of the Tribunal held that once the element of duty is collected, the bar unjust enrichment is applicable even subsequently credit notes were issued in this regard. Revenue also relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of Mauria Udyog Ltd. vs. CCE - 2007 (207) E.L.T. 31 (P & H). The contention is that Hon'ble High Court after relying upon the decision of Hon'ble Supreme Court in the case of MRF Ltd. vs. CCE, Madras - 1997 (92) E.L.T. 309 (S.C.) held that in the case of price reduction subsequently to the clearance of goods and the assessments were not provisional, the subsequent reduction in prices could not be made foundation for seeking refund under Section 11B of the Central Excise Act. The contention is that in the present case as the duty has been paid at the price prevalent at the time of clearance of goods and the same was recovered therefore in view of the above decisions, the refund claim is hit by the principle of unjust enrichment.
8. In respect of limitation contention of Appellant is that the refund for some period is beyond the period of limitation as provided under the Central Excise Act and as the assessments were not provisional therefore refund claim for this period is rightly to be held as time barred.
9. In this case the issue is whether the refund claim filed by the Appellant which is within the period of limitation as provided under the Central Excise Act, is hit by the principles of unjust enrichment. Admitted facts are that goods were cleared at the price prevalent at the time of clearance and duty was paid. Subsequently the prices were reduced as there was a price variation clause in the contract and after finalizing of price at the lower side the appellant issued credit notes. This fact is evident from the letter dated 10.12.2002 issued by the recipient of the goods. In the Certificate it was specifically mentioned that the revision has been adjusted against credit notes issued by the company.
10. Appellant relied upon the decisions of the Tribunal in the case of Universal Cylinders Ltd. (supra). In this case the customers refused the price of the cylinders as mentioned in the invoices and the same at the time of payment. In such a situation the Tribunal held that the claim is not hit by the principles of unjust enrichment. Same is the situation in the case of Rajasthan Electronics & Instruments Ltd. (supra) where the Tribunal after noticing the fact that the customers has neither paid price or duty in terms of the invoices under which the goods were cleared. In the case of UOI vs. A.K. Spintex Ltd. (supra) the Hon'ble High Court after noticing the facts that price mentioned in the invoices on which duty has been paid was not accepted by the customers and they protested and paid the less amount. Reliance of applicant in their own case will also not help the case as the Tribunal remanded the matter to the lower Authority and the decisions of the larger Bench of the Tribunal relied upon by Revenue were not taken into consideration.
11. The facts of the present case is different from the facts of the cases relied upon by the Appellants. In the present case admittedly the goods were cleared at the prevalent price and duty has been paid. Subsequently the prices were reduced. The assessments were not provisional. In view of these facts I find that the ratio of the decisions of the larger Bench in the case of S.Kumar's Ltd. and Grasim Ind. (Chemical Divn.) (supra) and the decision of Hon'ble P & H High Court in the case of Mauria Udyog Ltd. (supra) is fully applicable in the facts of present case. As the assessments were not provisional and the duty has been realized by the appellant hence the refund claim is hit by the principles of unjust enrichment even the credit notes were issued subsequently to the buyers in respect of higher duty charged. In view of the above discussion I find no infirmity in the impugned order and the Appeal is dismissed.
(Pronounced and dictated in the open court.)
sd/
(S.S.KANG) VICE PRESIDENT
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Appeal No.Ex.Ap.09/09