2017 (8) TMI 1165 - AT - Central Excise

Price variation clause - Refund of extra duty paid - denial on the ground that The buyer, M/s PSEB did not approve the escalated value as the material was received by them after the expiry of contractual delivery period. The appellants had not opted for provisional assessment - Held that - the issue in dispute in the present case is squarely covered by the judgment of Hon ble Punjab & Haryana High Court in the case of Mauria Udyog Ltd. Vs. CCE 2006 (8) TMI 49 - HIGH COURT OF PUNJAB & HARYANA (CHANDIGARH) , where it was held that Reduced price at later date could not be made foundation for seeking refund - appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim rejection based on extra duty payment for transformers supplied; Applicability of price variation clause; Justification for refund claim; Provisional assessment impact on refund claim; Unjust enrichment consideration.

Analysis:
1. The appellants, engaged in transformer manufacturing, filed a refund claim due to extra duty paid on transformers supplied to PSEB. The purchase order had a price variation clause, leading to increased prices on invoices. The buyer, PSEB, rejected the escalated value due to late delivery. The appellants did not opt for provisional assessment, and their refund claim was rejected by the adjudicating authority, upheld by the Ld. Commissioner (Appeals). The appeal contested the rejection.

2. The appellant's advocate argued that the issue was referred to the Larger Bench of the Supreme Court and cited relevant judgments supporting refund claims in similar situations. The advocate also contended that there was no unjust enrichment as the buyer approved a lesser value, invoking the price variation clause. Non-compliance with provisional assessment procedures, according to the advocate, did not negate the right to file a refund claim under Section 11B of the Central Excise Act, 1944.

3. The Revenue's representative supported the Ld. Commissioner (Appeals) findings and cited judgments favoring their stance. The presiding Member carefully reviewed the Supreme Court judgments mentioned and concluded that the issue in dispute did not involve short payment of duty or interest on supplementary invoices. The judgment of the Hon’ble Punjab & Haryana High Court in a similar case was cited, emphasizing the liability to pay duty based on the price at the time of goods clearance.

4. The presiding Member rejected the appellant's attempt to distinguish a relevant case, emphasizing the importance of government agreement for duty refunds and provisional assessments. The jurisdictional High Court's decision prevailed over Tribunal judgments cited by the appellant. The judgment in the Steel Authority of India Ltd. case reinforced the principle laid down in the MRF Ltd. case, supporting the decision to sustain the Ld. Commissioner (Appeals) order.

5. Ultimately, following the precedent set by the Hon’ble Punjab & Haryana High Court, the presiding Member upheld the Ld. Commissioner (Appeals) order, dismissing the appellant's appeal. The judgment was pronounced on 09.08.2017.