2006 (8) TMI 200 - HC - Central Excise

Summary

Issues: Appeal against order allowing refund; Entitlement to refund of duty paid; Application of Rule 9B of Central Excise Rules, 1944; Interpretation of judgments by Hon'ble Supreme Court; Consistency of Tribunal's decisions with Supreme Court judgments; Certification for appeal before Hon'ble Supreme Court.

In this case, the Revenue appealed against the Customs, Excise and Service Tax Appellate Tribunal's decision allowing a refund claimed by the assessee. The main issue was whether the assessee was entitled to a refund of duty paid at the time of disposal of goods, despite the subsequent reduction in the rate at which goods were supplied, without following the procedure under Rule 9B of the Central Excise Rules, 1944. The adjudicating Authority rejected the refund claim based on the principle that duty is to be applied on the price declared at the time of goods clearance, regardless of any later price reduction, citing judgments by the Hon'ble Supreme Court. The Commissioner (Appeals) upheld this decision, but the Tribunal overturned it, relying on its own precedents. The High Court, after considering the Supreme Court judgments and its previous decision on a similar issue, concluded that the claim for refund could not be upheld in this case, as the duty was not paid on a provisional basis and the goods were not cleared provisionally. Therefore, the appeal was allowed in favor of the Revenue, and the Tribunal's decision was set aside.

The High Court noted that the Tribunal's decision, along with its previous judgments, was contrary to the principles established by the Hon'ble Supreme Court in cases such as M.R.F. Ltd. and Metal Forgings. The Court emphasized that a subsequent reduction in price alone cannot justify a refund claim unless the duty was paid provisionally or the goods were cleared provisionally. The judgment in another related matter involving the same parties and issue further supported the Court's decision to disallow the refund claim based on the established legal principles. Consequently, the High Court allowed the appeal, answered the legal question in favor of the Revenue, and overturned the Tribunal's decision.

Additionally, the High Court rejected the oral prayer for certification for appeal before the Hon'ble Supreme Court under Section 35L(a) of the Central Excise Act, 1944, stating that the matter was already settled by the Supreme Court's judgments on the issue involved. Therefore, the request for certification was denied based on the existing legal clarity provided by the Supreme Court's decisions.