2013 (7) TMI 941 - AT - Central Excise

Adjustment of excess paid duty - whether appellant can adjust the duty paid excess or less from the depots of their own without resorting to refund provisions under Section 11B of the Central Excise Act, 1944? Held that - The judgment of Bajaj Tempo Ltd. v. CCE, Pune 2004 (7) TMI 145 - CESTAT, MUMBAI is squarely applicable to this case where appeal filed by Bajaj Tempo Ltd. was allowed holding that such an adjustment is proper. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant can adjust duty paid excess or less from their own depots without resorting to refund provisions under Section 11B of the Central Excise Act, 1944.

Analysis:
The appellant filed an appeal against OIA No. PJ/372/VDR-I/2012, dated 24-12-2012, to determine if they could adjust duty paid excess or less from their depots without using refund provisions under Section 11B. The appellant's advocate argued that there is no prohibition on such adjustments as duty is paid to the department at month-end, and the duty recovered from customers does not exceed what is paid to the department. The advocate cited case laws to support this argument. On the other hand, the respondent's AR contended that the appellant cannot make such adjustments on their own, and any excess duty should only be reclaimed through Section 11B to avoid unjust enrichment.

Upon careful consideration, the Tribunal examined the Central Excise Act's provisions regarding duty payment by the manufacturer at the time of clearance from the factory. The Tribunal noted that in depot sales, duty is paid at the factory clearance time based on the prevailing value, and further adjustments are unnecessary when goods are subsequently sold from depots at different prices. The Tribunal acknowledged that the appellant had been adjusting duty when goods were sold from depots at varying prices, even though duty was paid correctly at the factory clearance. The Tribunal clarified that if excess duty was paid due to higher depot sale prices, the revenue had no objections. However, if duty paid at the factory was higher but depot sale prices were lower, the appellant should have sought a refund under Section 11B to avoid unjust enrichment. The Tribunal emphasized that re-quantifying duty at depot sales was unnecessary if the appropriate duty was paid at factory clearance, and any differences did not lead to unjust enrichment. Citing a relevant case law, the Tribunal concluded that the appellant's adjustment was permissible.

Consequently, the Tribunal allowed the appeal filed by the appellant, based on the above considerations. The judgment was pronounced on 23-7-2013.