2013 (4) TMI 709 - HC - Central Excise

Denial of refund claim - refund of the higher duty paid on the higher price fixed in the formal order - Whether assessee is entitled to refund of difference of excise duty on the ground that subsequently there was fluctuation in the prices of commodities and the price was reduced - Held that - Commissioner itself has noted that the buyers had issued a certificate to the effect that the incidence of duty was not passed on to them. In case, the incidence of the duty was not passed on to the buyers, then the extra duty was paid by the assessee and in this eventuality its application could not be rejected - Assessee was entitled to refund of the difference of the excise duty paid and the Tribunal committed no illegality in allowing the appeal. - Decided against Revenue.

Issues involved:
1. Refund of higher duty paid on supplies due to price discrepancy.
2. Rejection of refund application by Adjudicating Officer.
3. Dismissal of appeal against rejection of refund application.
4. Appeal before Customs, Excise & Service Tax Appellate Tribunal (Tribunal) and subsequent allowance of the appeal.
5. Department's appeal against the Tribunal's decision.
6. Substantial question of law regarding entitlement to refund based on price fluctuation.
7. Consistency of Tribunal's decisions with no challenge from higher courts.
8. Buyer's certificate confirming non-passing of duty incidence.
9. Entitlement of the Assessee to refund based on duty payment and Tribunal's decision.
10. Dismissal of the appeal by the High Court.

Analysis:

1. The Assessee supplied explosives to various entities during a specific period, with prices fixed later than the supplies. The prices in the formal order were lower than those initially fixed, leading to a discrepancy in duty payment.

2. The Assessee applied for a refund of the higher duty paid due to the price difference. The Adjudicating Officer deemed the application timely but rejected it on 27-2-2003, prompting the Assessee to file an appeal.

3. The appeal against the rejection of the refund application was dismissed on 30-3-2004, compelling the Assessee to escalate the matter further.

4. Subsequently, the Assessee appealed to the Tribunal, which allowed the appeal based on precedents indicating a distinction between price reduction post-clearance versus settlement of prices post-removal of goods. This decision led to the Department's appeal challenging the Tribunal's ruling.

5. The High Court admitted the appeal based on a substantial question of law regarding the Assessee's entitlement to a refund due to price fluctuations, considering the Tribunal's consistent application of legal principles.

6. The High Court noted that there was no evidence of the Tribunal's decisions being overturned by higher courts, reinforcing the validity of the Tribunal's reasoning in similar cases.

7. Additionally, the Commissioner acknowledged that buyers confirmed the non-passing of duty incidence, implying that the Assessee bore the extra duty burden, warranting a refund if duty was not transferred to buyers.

8. Consequently, the High Court affirmed the Assessee's entitlement to the refund of the excise duty paid, as the Tribunal's decision was legally sound and aligned with the circumstances of the case.

9. Ultimately, the High Court found no merit in the Department's appeal and dismissed it, upholding the Tribunal's decision and affirming the Assessee's right to the refund based on the duty payment and legal considerations.

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