2000 (8) TMI 103 - HC - Central Excise

Summary

Issues:
Determining the correct rate of excise duty payable on goods supplied under a contract based on the date of delivery and the contractual terms.

Analysis:
The case involved a public limited company engaged in manufacturing cables participating in a tender to supply goods, including Polyethylene insulated Jelly Filled (PIJF) cables, to Telecom Centres. The tender required the separate quoting of excise duty, sales tax, and other statutory taxes. The excisable goods attracted an 18% excise duty during the relevant period, which later changed to 16% from a specified date. The dispute arose regarding the applicable excise duty rate on goods delivered before and after the rate change.

The petitioner argued that the old rate of 18% was applicable as the goods had left its premises before the rate change date, and the excise duty was to be paid as per the agreed price list. On the other hand, the respondent contended that the reduced rate of 16% applied since the title in the goods passed only upon delivery after the rate change date.

The court examined the tender documents and general conditions of the contract, which specified that prices were ex-factory, excise duty was to be quoted separately, and the purchaser reserved the right to seek a reduction in prices in case of statutory levy revisions during the supply period. It was noted that the price once fixed remained valid for the delivery period, and any increase or decrease in duties did not affect the agreed price during this period.

The court emphasized that the petitioner was entitled to recover excise duty at 18% for goods that had left its premises before the rate change date. The contractual provisions did not allow the purchaser to benefit from a reduction in duty rates after the goods had already been dispatched. Allowing the petitioner to pay a lower duty amount while receiving the higher agreed price would lead to unjust enrichment, contrary to the contract's spirit.

Therefore, the court concluded that the petitioner could claim excise duty at 18% for goods delivered before the rate change, provided they could provide proof of the delivery dates. The judgment clarified that any changes in Modvat account should be addressed separately by the petitioner with the relevant authorities, without expressing an opinion on that matter in the current ruling.