2014 (9) TMI 367 - HC - Central Excise

Finalization of the provisional assessments - refund claim on LPG cylinders supplied to oil companies - assesses have paid differential duty on cylinders consequent upon enhancement of price after clearance - Whether on facts and in the circumstances of the case, the 2nd respondent is right in upholding the order of the Appellate Authority, which ordered finalisation of provisional assessment under Rule 9B of Central Excise Rules, 1944 and also pursuing refund claim thereafter, as the 1st respondent had not requested for provisional assessment for the relevant period, as envisaged in Section 11B of Central Excise Act, 1944 - Held that - assessment in the case of the first respondent/assessees was not provisional. In this regard, the assessees letter dated March 25, 1999 addressed to the Assistant Commissioner of Central Excise, Chrompet Division acknowledging the receipt of provisional Assessment order for the financial year 1997-98 stated that such provisional assessment has been resorted to for price variation clause contained in the contract received from Oil Corporations and further stated that they have been paying the differential duty whenever required at the time of raising the supplementary invoices and approaching the Range Officer, Palavakkam requesting issuance of 57(E) certificate for differential duty payment. Further the assessee informed that as the price variation is regular to those goods, the provisional assessment need not be resorted to and undertook to pay differential duty in such cases wherever supplementary invoices are raised periodically in future. Assessment in both these cases related to 1997-98 and from the order passed by the Original Authority, it is seen that the final assessment was made in the year 1998 itself. Therefore, the claim for refund is wholly barred by limitation and the benefit of sub-clause (eb) of Explanation 5 to Section 11B of the Act claimed by the assessee was rightly denied by the Original Authority. However, the Tribunal under misconception that the assessments were provisional and taking into consideration that there are earlier decisions of other Tribunals, allowed the appeal filed by the assessee. claim for refund made by the respondents/assessees is barred by limitation - Decided in favour of Revenue.

Summary

Issues:
1. Entitlement to refund claim beyond the prescribed time limit under Section 11B of the Central Excise Act, 1944.
2. Determination of whether assessments were provisional or final.
3. Interpretation of the relevant date for refund claims under Explanation 5 to Section 11B.

Analysis:
1. The case involved a dispute regarding the refund claim filed by the first respondent/assessees beyond the one-year period from the relevant date as specified in Section 11B of the Central Excise Act, 1944. The refund claim was based on price variations in contracts with oil companies. The Assistant Commissioner initially rejected the claim as time-barred, leading to subsequent appeals.

2. The Adjudicating Authority rejected the refund claims citing that the assessments were final, not provisional, and the duty incidence was passed on to customers. The Commissioner (Appeals) reversed this decision, allowing the refund claim to proceed after finalizing the cylinder price. The Tribunal upheld the Commissioner's decision based on precedent cases where similar refund claims on LPG cylinders were allowed, dismissing the Revenue's appeal.

3. The High Court analyzed the facts and established that the assessments were indeed final, not provisional, as confirmed by the assessees' correspondence with the Central Excise authorities. The relevant date for the refund claim was determined to be one year from the final assessment, which had already passed in the case at hand. Contrary to the Tribunal's view, the assessments were not provisional, and the claim was found to be time-barred.

4. The Court emphasized that the claim for refund by the assessees was beyond the statutory time limit, as per Section 11B of the Act. The Revenue's contention that the assessments were final was upheld, and the Tribunal's decision was overturned. Consequently, the appeals filed by the Revenue were allowed, and the original authority's order was reinstated, denying the refund claim due to being barred by limitation.