2001 (12) TMI 174 - AT - Central Excise

Summary

Issues:
Whether the refund of Central Excise duty is admissible in case of reduction of price of excisable goods by Customers subsequent to clearance from factory premises on payment of duty.

Analysis:
The appeal involved the question of whether M/s. Hindustan Engineering & Industries Ltd. is entitled to a refund of Central Excise duty after their customers reduced the prices of excisable goods post-clearance from the factory premises. The appellant's representative argued that the prices were provisional initially and were later finalized at lower rates, making them eligible for a refund of the excess duty paid. Reference was made to a legal decision highlighting that a fixed price is not always a requirement in a sales contract. It was also emphasized that no provisional assessment was opted for, and the claim was filed within the statutory time limit. The appellant's representative further argued that the escalation clause applied to other supplies under the same Purchase Order, reinforcing the claim for a refund.

On the contrary, the Senior Departmental Representative contended that the assessment was not provisional, and the goods were cleared based on the prices declared by the appellants themselves, which were considered approved prices under the law. The argument was made that the decision cited by the appellant would not be applicable in this case.

After considering both arguments, the Tribunal noted that the Contract explicitly stated that the rates were provisional and subject to change, indicating that the prices at the time of goods removal were not final. The Tribunal also observed that the Contract mentioned additional quantities ordered under a subsequent Contract, further supporting the provisional nature of the prices. Despite not opting for provisional assessment, the Tribunal ruled that the prices were not final due to the specific clauses in the Contract. As the refund claim was filed within the prescribed six-month period, the Tribunal held that the refund of excess duty paid due to price reduction was admissible. Consequently, the appeal was allowed with consequential relief granted to the appellant.