2002 (7) TMI 601 - AT - Central Excise

Summary

Issues:
Refund claim rejection for differential duty paid on LPG removed in bulk earmarked for domestic use.

Analysis:
The Appellate Tribunal CEGAT, Kolkata, in the case, dealt with the rejection of a refund claim by the authorities below for the appellant's payment of differential duty on LPG removed in bulk earmarked for domestic use. The appellant contended that due to late receipt of the administered price fixed by the Oil Coordination Committee, they paid duty at a higher rate applicable to LPG bulk 'essential' instead of the lower rate for LPG packed 'domestic.' The dispute arose as the authorities assessed the duty at the higher value for LPG removed in bulk, leading to the rejection of the refund claim by the Assistant Commissioner and subsequent affirmation by the Commissioner (Appeals).

The Finance Manager for the appellant argued that the issue had been previously decided by the Tribunal in cases involving Gas Authority of India Ltd. and Oil India Ltd., where it was established that the assessable value of LPG for domestic consumption should be based on the price fixed by the Oil Coordination Committee, regardless of whether the LPG was removed in bulk for bottling and domestic sale. The appellant emphasized that the rejection of their claim due to procedural reasons like non-compliance with warehousing procedures was unjustified, especially considering the Tribunal's precedent in similar cases. They also highlighted the absence of unjust enrichment as the LPG was ultimately sold at lower prices to domestic consumers as part of a government policy to provide subsidized LPG.

After considering the submissions from both parties, the Tribunal found that the issue was settled law based on the decision of the Larger Bench in the Gas Authority of India Ltd. case. The Tribunal held that duty should have been paid based on the price fixed for LPG packed domestic by the Oil Coordination Committee, even if the LPG was removed in bulk for bottling and domestic sale. By following the precedent set in the earlier case involving IOC, the Tribunal set aside the impugned order, remanding the matter to the Assistant Commissioner for reevaluation in line with the law, including the consideration of unjust enrichment. Consequently, the appeal was allowed in favor of the appellant, directing the authorities to reassess the duty payment based on the applicable lower price for LPG packed domestic.