Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Maharashtra Cylinder Ltd. on 8 July, 2003
Equivalent citations: 2003(90)ECC371, 2003(157)ELT688(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1. When the matter came up for hearing yesterday respondent was absent and unrepresented but by its letter has requested adjournment on the ground that its employee is unable to attend on account of illness of his mother. It is the third time the matter has come up. When the respondent was represented by Mr. Vipin Jain, Chartered Accountant on 1.4.2003, on which date it was adjourned. It was adjourned on 7th May, 2003 at the request of the assessee. The document presently submitted by the assessee does not incidentally suggest any illness or disease as claimed. We therefore decline to adjourn and having heard the departmental representative proceed to dictate the order. No submissions have been filed by the assessee.
2. The assessee is a manufacturer of cylinders which it supplied to Indian Oil Corporation, Hindustan Petroleum Corporation Ltd., or Bharat Petroleum Corporation Ltd. to be used by them for storing liquified petroleum gas. It filed in February 2001 a claim for refund of part of the excise duty paid on the cylinder which were cleared between 1.7.1999 and 31.8.2000. The basis of the claim was that, acting upon a price variation clause in the agreement that was signed between buyer and seller, the buyer had redeemed the price of the cylinder retrospectively.
3. The notice issued to the assessee proposed dismissal of the claim on the ground that it was barred by limitation having been filed beyond six months from the relevant date and on the further ground that it has not been shown that the incidence of duty had not been passed on, as required in sub-section (2) of Section 11B of the Act.
4. The assessee contended in reply that date of limitation ought of run from the date of the communication by the oil companies reducing the price of the cylinder and the claim was therefore in fact in time. It relied upon a certificate of a chartered accountant to say that the incidence of duty has not been passed on.
5. The asst. Commissioner did not accept these contentions. He said that the period of limitation ought to run from the date of payment of duty as provided in sub-clause (f) of clause (b) of the Explanation below sub-section (5) of section 11B of the Act and therefore the claim were barred by limitation. He further noted that the letters of the oil companies relied upon by the assessee support its claim for reduction of the price indicated the reduction to the provisional and therefore not sufficient evidence of reduction of price. He dismissed the claim. The assessee appealed this order to the Commissioner (Appeals). The Commissioner took the view that since the agreement between the buyer and the seller contained a clause for variation of the price the assessment made by the authorities was provisional, relying in support upon the Bombay High Court's judgment in Premier Automobile v. Union of India 1987 (30) ELT 71 and the decision of the Tribunal in Indian Aluminium Co. v. CCE 1997 (95) ELT 386. He concluded that the period of limitation specified in Section 11B will not apply. He found the certificate of the chartered accountant sufficient evidence to show that incidence of duty had not been passed on. He therefore set aside the order of the Asst. Commissioner and allowed the claim. Hence this appeal by the Commissioner.
6. The departmental representative contends that the Bombay High Court's judgement in Premier Automobile v. UOI was based upon the view that the assessment of the motor cars manufactured by the assessee was provisional because the price of the cars was subject to applicability of the Motor Cars (Distribution and Sales) Control (Amendment) Order, 1969, which was pending before the Supreme Court in a writ petition filed by the assessee. He contends that the same principle has been followed in Indian Aluminium in which the Tribunal noted that the price list filed by the assessee were accompanies by the contract of the purchase order which contained the price escalation clause, there is no such case made by the assessee in the present case. During the relevant time, the rules did not require filing of a price list or price declaration by the assessee in the case that it had cleared and the assessment itself completed by the assessee in terms of rule 173F. The assessee did not at any time bring to the notice of the department that the price lists were provisional and subject to revision either upward or downward. Therefore, the assessment could not be considered to be provisional and were final.
7. The departmental representative does not dispute that to some extent the claims are within the period of limitation of one year from the date of payment of duty. With regard to other claims, we do not find it possible to say that period of limitation prescribed in Section 11B will not apply. Let us now consider the facts of Premier Automobiles Ltd. The company had fixed a sale price for its Fiat cars which was higher than the price at which these cars could be sold in terms of the Motor Cars (Distribution and Sales) Control (Amendment) Order, 1969. The Company and other manufacturer filed a writ petition to the Supreme Court challenging the constitutional validity of this order. During the pendency of this writ petition, the Supreme Court declined to grant interim relief and the company therefore sold the car at the price determined in terms of the order. It made it clear to its dealer that the price was provisional and would be subject to the ultimate decision of the Supreme Court. The Supreme Court finally held the price control order would not be operative. As a result the company become entitled to recover the additional sale price. Notice was issued by the department proposing to recover the duty on the difference in the sale price and this was confirmed by the adjudicating authority and the appellate authority. The company carried the matter to the High Court. The learned single judge of the High Court did not accept the company petition and the matter went up in appeal. The division bench of the High Court did not accept the contention on behalf of the company that since the assessment had been finalised at the lower price, the demand for duty was barred by limitation. It said "It is not in dispute that both the appellant and the department were aware of the fact that the final price was dependent on the decision of the Supreme Court. It cannot be ignored that the department would not have completed the required by taking into consideration any price in excess of the price fixed under the price control order and therefore the mere fact that the assessment order were final would not showed up the department by claiming the additional duty. The ratio of this decision was applied by the department in Indian Aluminium Cables Ltd. to poly vinyl chloride cables supplied by the assessee to state electricity board against specific contracts or order containing a price variation clause. The Tribunal noted that the price list which was filed in part 2 by the assessee had enclosed the contracts or purchase orders contained the price variation clause. Therefore, the department could not have finalised the price.
8. In both these cases, the crucial factor was that the department at the time when the goods were cleared could not have finalised the price because the price were provisional being subject to variation and not final. This significant element is totally lacking in the case before us. No price list or declaration had been filed by the assessee, nor is it contended by the assessee that the fact of the prices being provisional were brought to the notice of the department and a request was made for the provisional assessment. Reliance by the Commissioner (Appeals) in the judgement of the Supreme Court in Samrat International v. CCE 1992 (58) ELT 561 is entirely misplaced. Unlike in a situation under consideration by the Supreme Court in the case there was no requirement of final approval of the price list, since such a price list was not required to be filed and, hence no period would exist between the filing of a price list and the finalisation the clearance made during which could be considered provisionally. The reliance by the departmental representative on the judgement of the Supreme Court in Metal Forgings v. UOI 2002 (146) ELT 241 to say that in the absence of a formal order in the rule 9B there cannot be provisional assessment is sound. These claims would thus be clearly barred by limitation.
9. In respect of the claim which are filed within the period of limitation, the judgment of the Supreme Court in MRF Ltd. v. CCE 1997 (92) ELT 309 would apply. In that judgment that Court had said that once the assessee has cleared the goods on classification price indicated by the department at the time of removal of the goods at the factory gate the assessee becomes liable to payment of duty on that day and time and subsequent reduction in price list for whatever reason (emphasis supplied) cannot be a matter of concern to the Central Excise department. Insofar as reliability of payment of excise duty was concerned, and confirmed the decision in the Tribunal in that refund would not be permissible to the assessee on the ground that the price at which it had sold its tyres had subsequently been reduced by an order of the Central Government.
10. We must also note that the certificate of the chartered accountant by itself would not constitute sufficient authority that the duty has been passed on. However, it is not necessary to consider this aspect since we have held it could not be allowed on merits.
11. The appeal is accordingly allowed and the impugned order set aside and the order of the Asst. Commissioner restored.