2001 (12) TMI 711 - AT - Central Excise

Summary

Issues involved:
Whether the refund of Central Excise duty is admissible in case of reduction of price of excisable goods by Customers subsequent to clearance.

Analysis:
The appeal filed by M/s. Hindustan Engineering & Industries Ltd. raised the issue of whether a refund of Central Excise duty is permissible when the price of excisable goods is reduced by customers after the goods have been cleared from the factory premises. The appellant contended that the prices were provisional and subject to change as per the contract, leading to a reduction in prices finalized later. The appellant argued that the duty paid was in excess due to the subsequent price reduction, making them eligible for a refund. Reference was made to legal precedents highlighting that the existence of contracts with unfixed prices is not uncommon. The appellant also emphasized that no provisional assessment was opted for and that the refund claim was within the statutory time limit specified in Section 11B of the Central Excise Act.

The respondent, on the other hand, argued that the assessment was not provisional, and the goods were cleared based on the prices declared by the appellant themselves, which were considered approved prices under the law. The respondent contended that the decision in Easter Industries would not be applicable in this case.

Upon considering the arguments from both sides, the Tribunal noted that the contract contained a clause stating that the rates were provisional and subject to change, indicating that the prices at the time of clearance were not final. Additionally, it was observed that the appellant did not resort to provisional assessment under Rule 9B of the Central Excise Rules. As the refund claim was made within the statutory time limit, the Tribunal held that the refund of excess duty paid due to the price reduction was admissible. Consequently, the appeal was allowed with consequential relief granted to the appellant.