2013 (5) TMI 513 - AT - Central Excise

Valuation - Demand of differential duty Penalty - Held that - though the duty was paid by the appellant at Rs.1064/- per meter but they did not receive the above consideration from the Electricity Board on account of subsequent dispute about the prices. The Board further reduced the price to Rs.600/- per electricity meter. On the above prices, the appellant had actually filed refund claim with the Revenue, which was rejected on the ground that as contracted price was Rs.1064/- per meter, subsequent reduction of prices will not have the effect on the payment of duty. - As the earlier matter decided by the Tribunal in 2005 (2) TMI 549 - CESTAT, NEW DELHI it stands rejected by the Tribunal that original assessment and payment of duty took place at the contracted price and as such, there was no justification for subsequent reduction in price. - As such, it is seen that price of Rs.1064/- was upheld by the Tribunal in the earlier case and while rejecting the refund claim of the applicant further reduced the price. - Decided in favor of assessee.

Summary

Issues:
1. Discrepancy in duty liability for electronic meters cleared before and after a specific date.
2. Dispute regarding the pricing of electricity meters supplied under a purchase order.
3. Rejection of refund claim by the Revenue based on the contracted price.

Analysis:
1. The appellant, engaged in manufacturing electricity meters, received a purchase order specifying different prices for meters supplied before and after 31.3.2002. The Revenue contended that duty liability should be calculated at the higher price for all clearances. A differential demand was raised, which the Tribunal found unjustified due to the pre-determined pricing in the purchase order.

2. The Tribunal observed that the purchase order clearly outlined the pricing structure, with higher rates for supplies before 31.3.2002 and reduced rates thereafter. Despite paying duty at the lower rate, the appellant faced a pricing dispute with the Electricity Board, leading to a refund claim rejection by the Revenue. The Tribunal referred to a previous case where the contracted price was upheld, emphasizing that duty payment was based on the agreed price, irrespective of subsequent price reductions.

3. Considering the contractual terms and the Tribunal's previous decision, the Tribunal set aside the Revenue's demand and allowed the appeal, providing consequential relief to the appellant. The judgment highlighted the importance of honoring contracted prices for duty liability assessment, even in the event of price adjustments post-clearance, reaffirming the Tribunal's stance on the matter.