2016 (11) TMI 181 - AT - Central Excise

Price variation clause - refund claim - reduction in price, resulting in excess payment of duty - Gear set - Gear Pin - redetermination of assessable value after clearance of the goods from the factory - the decision in the case of Commissioner of Central Excise v. Tesla Transormers Ltd. 2012 (8) TMI 843 - CESTAT NEW DELHI and Commissioner of Central Excise v. P.C. Pole Factory 2012 (8) TMI 140 - CESTAT, MUMBAI referred, where it was held that in such case where price variation was anticipated, the appellant should have sought provisional assessment as provided in law - further it is stated that both the judgements had relied upon the order of the Hon ble Supreme Court in the case of Mauria Udyog Ltd. v. Commissioner - 2007 (10) TMI 619 - SUPREME COURT wherein the Hon ble Supreme Court had dismissed the Petition for Special Leave to Appeal against the judgement and order dated 22.08.2006 of the Punjab and Haryana High Court. Held that - there are conflicting judgements of the Tribunal on this issue. However, considering that the judgements in the case of Tesla Transformers Ltd. and P.C. Pole Factory, which are on identical facts are based on the judgement of the Hon ble Punjab & Haryana in the case of Mauria Udyog which has been upheld by the Hon ble Supreme Court. It is categorically mentioned in the latter that the issue is squarely covered by the judgement of the Hon ble Supreme Court and also ruled that constitution of Larger Bench by the Tribunal was not necessary. Respectfully following the said judgement, I am not recommending constitution of a Larger Bench and deciding the matter in favour of the Revenue on the basis of the judgements in the cases of Mauria Udyog Ltd., P.C. Pole Factory and Tesla Transformers Ltd. The order passed by Commissioner (Appeals) is correct and legal and is therefore upheld - The appeal filed by the party is rejected.

Summary

Issues:
Refund claim based on price reduction in goods supplied, applicability of Section 4 for duty payment, conflicting judgments on provisional assessment requirement.

Analysis:
The appeal involved a dispute regarding a refund claim by the appellant, a manufacturer of motor vehicle parts, following a price reduction in goods supplied to a customer. The appellant had cleared Gear set and Gear Pin to a company at an initial price, which was later reduced with retrospective effect. This reduction led to excess payment of duty, prompting the appellant to file a refund claim, which was rejected by the Asst. Commissioner and the Commissioner (Appeals). The main contention was whether the price variation clause in the purchase order allowed for a refund subsequent to clearance of goods, as argued by the appellant, or if provisional assessment should have been sought, as contended by the Revenue.

The appellant's counsel argued that the purchase order clearly indicated the variation in price, and since the customers had paid the reduced price, a refund should be allowed as per Section 4, which provides for duty payment based on the value actually paid or payable at the time of clearance or later. The appellant cited relevant judgments to support their position, emphasizing the validity of the refund claim.

On the other hand, the Revenue argued that in cases of anticipated price variation, provisional assessment should have been sought, as settled by previous Tribunal judgments and the Hon'ble Supreme Court's decision in Mauria Udyog Ltd. v. Commissioner. The Revenue highlighted the necessity of following established procedures and legal precedents in such matters to avoid excess duty payments and subsequent refund claims.

The Tribunal, after considering the conflicting judgments on the issue, particularly those in the cases of Tesla Transformers Ltd. and P.C. Pole Factory, relied on the decision in Mauria Udyog Ltd. upheld by the Supreme Court. The Tribunal concluded that the issue was squarely covered by the Supreme Court's judgment, and therefore, decided in favor of the Revenue, upholding the Commissioner (Appeals) order and rejecting the appeal by the appellant. The Tribunal declined the appellant's request for a Larger Bench and certification for appeal to the Supreme Court, citing the clear legal position established by the relevant judgments.

In summary, the Tribunal's decision was based on the interpretation of Section 4, the requirement for provisional assessment in cases of price variation, and the precedence set by the Supreme Court's ruling in Mauria Udyog Ltd. The judgment emphasized the importance of adhering to established legal principles and precedents in matters of duty payment and refund claims to maintain consistency and avoid undue financial implications for the Revenue.