2013 (6) TMI 509 - AT - Central Excise

Refund - price revision clause - valuation - Excess payment of duty - supply of LPG Cylinders to IOC Ltd. and HPC Ltd. - Unjust enrichment - Held that - refund can be granted in such cases as may be seen from the decision in the case of Universal Cylinders (2004 (5) TMI 218 - CESTAT, NEW DELHI) which was affirmed by the Apex Court by dismissing the appeal. So this issue is already decided in favour of the appellant to the extent it relates to claim which is not time-barred. Unjust enrichment - collection of money from the buyer - Held that - Revenue is relying on the decision of the Apex Court dismissing the appeal against the decision in the case of Sangam Processors (Bhilwara) Ltd. (1993 (2) TMI 211 - CEGAT, NEW DELHI). This was not a case of goods cleared under a price variation clause but was in the context of a Notification issued under Section 11C of Central Excise Act. The decision in the case Grasim Industries 2011 (8) TMI 689 - SUPREME COURT OF INDIA relies on the decision in the case of Sangam Processors (Bhilwara) Ltd. Since the matter in relation to contracts involving price variation clause and where the buyer adjusted the excess price paid on certain clearances in the price of later clearance has been specifically examined in the case of Universal Cylinders and held in favour of assessee and affirmed by Supreme Court this decision has to be adopted in this case. - Decided in favor of assessee.

Summary

Issues:
1. Whether a refund can be granted to an assessee when the price of excisable goods is revised downwards after clearance due to a price variation clause in the contract, and the buyer adjusts the excess payment made earlier.
2. Whether unjust enrichment is involved in granting such refunds.

Issue-I:
The Respondents, engaged in manufacturing LPG cylinders, supplied them to oil companies under purchase orders with a price variation clause. The dispute arose when prices were retrospectively reduced, leading to excess payments by the Respondents. The Assistant Commissioner rejected the refund claims citing the MRF Ltd. case and the Hindustan Wires Ltd. case, also noting time-bar issues and unjust enrichment concerns. The Commissioner (Appeals) found the refund claims admissible under Section 11B, relying on the Universal Cylinders Ltd. case and the Telephone Cables Ltd. case. The Revenue appealed, citing the MRF Ltd. case and the Premier Plastic Pipes case. The Tribunal examined the issue, considering past decisions and affirmed the admissibility of the refund claims not time-barred.

Issue-II:
Regarding unjust enrichment, the Revenue cited the Sangam Processors case and the Grasim Industries case, while the Respondents relied on various decisions including the Universal Cylinders Ltd. case and the Telephone Cables Ltd. case. The Tribunal discussed different aspects of unjust enrichment, focusing on whether the assessee collected excise duty from the buyer and if the buyer utilized Modvat credit. The Tribunal found the first and second aspects relevant in this case, rejecting the Revenue's arguments based on past decisions and affirming the admissibility of the refund claims not time-barred. The Tribunal concluded that the appeals filed by the Revenue were rejected based on the discussions and analysis presented.

Judgment:
The Tribunal rejected the Revenue's appeals, upholding the admissibility of refund claims not time-barred in situations where price revisions due to a price variation clause led to excess payments by the assessee. Additionally, the Tribunal analyzed the unjust enrichment aspect, finding the first and second aspects relevant in this case and dismissing the Revenue's arguments based on past decisions. The Tribunal's decision was based on detailed discussions and examination of relevant legal precedents, ultimately affirming the admissibility of the refund claims in question.