2017 (2) TMI 530 - AT - Central Excise

Refund claim - price variation clause - payment of excess duty - rejection on the ground that the appellants have not resorted to provisional assessment - Held that - Vide letter dated 12.01.2011 the appellant has requested the Additional Commissioner, Kadapa division for provisional assessment stating the conditions in the purchase order - When the department has denied provisional assessment particularly, they cannot deny the refund saying that the appellant has not resorted to provisional assessment - appellant is eligible for refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim due to non-resort to provisional assessment.

Analysis:
The appeal before the Appellate Tribunal CESTAT Hyderabad involved the rejection of a refund claim by the appellants, who were engaged in the manufacture of electrical transformers. The appellants had cleared transformers to institutional consumers, including government-controlled companies, and paid duty based on purchase orders with price variation clauses. The refund claim of ?95,490 for excess central excise duty paid during February 2013 to June 2013 was rejected by the original authority and the Commissioner (Appeals) due to the absence of provisional assessment. The appellants contended that they had requested provisional assessment, which was denied by the department, making the rejection of the refund claim unfair.

During the proceedings, the appellant argued that despite requesting provisional assessment, the department denied the request, leading to the rejection of the refund claim. On the other hand, the department, represented by the Ld. AR, relied on a previous decision to support the requirement of provisional assessment for granting refunds. The tribunal noted that the show cause notice proposed rejection of the refund claim based on the absence of provisional assessment. The appellant's request for provisional assessment was declined by the Additional Commissioner, establishing that the denial of refund solely on the grounds of non-resort to provisional assessment was unjustified. The tribunal distinguished the cited decision, emphasizing the direct request for provisional assessment by the appellant, which was denied by the department. Consequently, the impugned order rejecting the refund was set aside, and the tribunal held the appellant eligible for the refund, allowing the appeal with any consequential relief.

In conclusion, the tribunal's judgment highlighted the significance of a direct request for provisional assessment by the appellant, which was denied by the department, as a crucial factor in determining the eligibility for a refund. The tribunal's decision emphasized the unjust nature of denying a refund solely based on the absence of provisional assessment when the appellant had made a legitimate request for the same, thus warranting the allowance of the appeal and granting the refund to the appellants.