Customs, Excise and Gold Tribunal - Hyderabad
Andhra Pradesh Paper Mills Ltd. vs Cc And Ce on 12 October, 1999
Equivalent citations: 2000(90)ECR228(TRI.-HYDERABAD)
ORDER V.K. Ashtana, Member (T)
1. Appeal No. E/919/95-A is against order-in-appeal No. 3/95(G) CE dated 27.1.1995 and appeal No. E/920/95A is against OIA No. 2/95 (G) CE dated 27.1.1995 passed by Commissioner of Customs & Central Excise (Appeals). Since the facts in both the cases are similar, therefore these are being considered together and disposed of by this common order.
2. Heard Shri C. Chidambaram, Ld. Consultant for appellants and Shri Section Kannan, Ld. DR.
3. Ld. Consultant submits that the issue involves deductibility of cash discount from the assessable value of the goods which were first cleared from the factory gate to their depots and consequently after a lapse of certain time, were sold to the wholesale dealers from the depots. He submits that availability of cash discount scheme was made known to all buyers in advance and was uniformly available to all buyers. However, the quantum of discount available was known only after the goods were sold and the payments thereof received from the buyers within the period by virtue of which they qualified for the cash discount. Therefore, since whether such discount would be available to the buyer or not was not known at the time of clearance of the goods from the factory gate, appellants by letters to the department indicated that they would be filing refund claims at a later date after the exact quantum of cash discount given was available from their depots. The order-in-appeals which were upheld by these two orders-in-original impugned had held that since their formal refund claim was lodged after the expiry of the period of 6 months provided in Section 11B of the Act. Therefore, their claims were partly time barred and to that extent certain amounts out of total refund claims were not allowed. Ld. Consultant submits that this issue is no longer res integra as exactly similar situation was considered by this Tribunal which vide final order No. 1196 to 1201/98 dated 23.6.1998 arising out of 6 batch of appeals had considered the matter in detail and had held as follows:
The first of these issues is regarding Cash Discount wherein the claims have been rejected on time bar as the formal refund claims in the prescribed format were filed before the Proper Officer after the expiry of 6 months from the date of payment of duty. While considering the arguments advanced by the appellants in this connection, we find that they faced a situation of uncertainty at the time goods are cleared from the factory gate as far as their valuation is concerned under Section 4. This is because the goods are not cleared from the factory gate for direct sale but on stock transfer basis to their field organisations and the actual sale to customers takes place therefrom at a much later date. However, it is the declared policy of the appellant to give cash discount in case the payments by the buyers are settled within the stipulated time. Since the date of actual sale is not known at the time goods were removed from the factory gate on payment of duty, it is the element of cash discount which could be made available to the appellants as per this policy which is also now known at that time. Therefore, the appellants wrote letters to the Proper Officer of Central Excise explaining this position and claiming that they would be filing refund claim on this account as and when the details of goods sold from these field organisations is available to them. It is the case of the Revenue that such blanket letter cannot be treated as refund claim. The correct procedural system as laid down under the C.E. Rules would have been for the proper officers, on receipt of such a letter, to order provisional assessment. However, this was not done. Therefore, appellants find themselves in a position where their right for refund of duty erroneously paid (in view of the cash discount being deducted from the assessable value) is in effect rendered a nullity on grounds of limitation under Section 11B simply because the sale of goods takes place at a date much later to the date of payment of duty. We are not inclined to accept this view of the Revenue because we cannot read the limitation contained in Section 11B in such a manner that it negates the very substantive right of refund contained in that section. Because such an interpretation would make the right of refund available therein a mere mockery in such a situation. It is precisely this consideration which had perhaps weighed with the Hon'ble Tribunal when they took a similar view in the case of Hindustan Bobbin Industries . The facts in that case were not concerned with refund, but the principle applied was the same. The facts were that under a conditional exemption notification, an exemption was claimed on 13.10.1980 whereas the formal refund claim was filed later. It was held therein that "this date is of crucial importance and the time bar is required to be calculated with reference to this date not the date of filing of the formal refund claim in 1981 which is merely consequential to and flows from the order of the Assistant Collector". The same principle is adopted again by the Hon'ble Tribunal in their Judgment of Amrith Paper Mills Pvt. Ltd. wherein it was held that a letter written by the assessee to the Superintendent pointing out the excess payment made by them and requesting for refund of the same constitutes a valid refund claim. In this case, the formal refund claim was submitted subsequently after the completion of RT-12 assessments. It was held that the formal claim was a continuation of the original claim and therefore not hit by time bar under Section 11B. We note that while arriving at this decision, the Hon'ble Tribunal had followed the similar principles laid down in the case of GTC . We, therefore, find that refund claim on this account cannot be rejected on the ground of time bar in view of the said letters, formal claims being only in continuation thereon.
4. Ld. Consultant submits that the facts in these appeals are absolutely identical in as much as that vide their letters they had staked their claim for refund and the formal refund claims were submitted only after the data was available after the cash discount was given to the buyers in the form of credit notes. Therefore, he prays that ratio of the aforesaid final order is clearly applicable to this case also. Hence, he prays that their appeals may be allowed.
5. Ld. DR Shri S. Kannan reiterates the departmental point of view.
6. We have carefully considered the submissions and records of the case and find that the matter is no longer res integra in as much as the question of delay in lodging of formal claim for refund which had been preceded by general claim vide letter indicating therein the reasons as to why the formal claim would be lodged later in case where the goods were sold from the depots involving the cash discount scheme was considered. We find that the same issue is involved in this case. However, before the law as laid down in the above mentioned final orders of this Tribunal can be applied to the facts of this case, the facts themselves would need to be verified. Since this involves detailed examination of the facts, it would be but proper that the same would be done by the original authority himself. Therefore, it is necessary to set aside the orders-in-appeal impugned and to remand the matter to the original authority with the directions that principles of law already upheld in the above noted final order of this Tribunal and the appellants' own case should be applied to the facts of this case in these de novo proceedings being sent to him. Needless to say that appellants shall be given opportunity to be heard before a final speaking order is passed. Ordered accordingly. Appeals succeed by way of remand.
(Pronounced and dictated in open court).