2015 (1) TMI 847 - HC - Central Excise

Denial of refund claim - valuation - reduction of amount of discount from the value - Held that - Commissioner of Central Excise (Appeals) has recorded a finding that the availability of the discount under the credit note was already known to the buyers before the sale and that the sale price actually realised by the assessee was less than the sale price realizable as per the invoices. The Commissioner of Central Excise (Appeals) has further held that it was not a case of recovery of additional duty amount from the buyers. - However, Tribunal held that that there was no evidence to show that the assessee had actually issued credit notes in respect of the duty burden initially passed on to its customers at the time of clearance of the goods. This finding of the Tribunal is contrary to the finding of fact recorded by the Commissioner of Central Excise (Appeals). In fact in the appeal memo filed by the revenue before the CESTAT, no such plea was raised by the revenue. In these circumstances, counsel for the parties state that the impugned decision of the Tribunal 2010 (11) TMI 300 - CESTAT, MUMBAI be quashed and set aside and the matter be restored to the file of the CESTAT for de novo consideration in accordance with law. Accordingly, the impugned order dated 4-11-2010 is quashed and set aside and the matter is restored to the file of the CESTAT for de novo consideration in accordance with law - Decided in favour of assessee.

Summary

Issues:
Applicability of refund claim entitlement based on credit notes issuance.

Analysis:
The High Court of Bombay addressed the substantial question of law regarding the entitlement of the assessee to a refund claim. The appeal was admitted for final hearing based on this question with the consent of both parties. The Commissioner of Central Excise (Appeals) had allowed the refund based on a verification report recommending the grant of the refund as claimed by the assessee. It was noted that the buyers were aware of the discount under the credit note before the sale, and the actual sale price realized was less than the price as per the invoices. Importantly, it was emphasized that there was no recovery of additional duty amount from the buyers. However, the Tribunal set aside the appellate authority's order, citing a lack of evidence showing that credit notes were issued for the duty burden initially passed on to customers during goods clearance. This decision contradicted the findings of the Commissioner of Central Excise (Appeals), and it was highlighted that the revenue did not raise this plea in the appeal memo before the CESTAT. Consequently, both parties agreed to quash the Tribunal's decision and restore the matter to the CESTAT for fresh consideration in accordance with the law. The High Court allowed the appeal with no order as to costs, keeping the contentions of both parties open for future proceedings.