2009 (11) TMI 417 - AT - Central Excise

Refund- Price variation clause- The appellants filed this appeal against the impugned order whereby refund claim of the appellants was rejected. The appellants filed refund claim, this refund claim was filed in pursuance to the Price Variation Clause in the contract for supply of explosives. The contention is that the goods were cleared and thereafter, on performance of the explosives, the price is reduced and the appellants received the reduced price, hence, the appellants are entitled for refund of Excise duty paid at the time of clearance of goods. Held that- no price variation clause in the agreement. Appellants request for provisional assessment was declined which was not challenged. Refund rejected.

Summary

Issues:
Refund claim rejection based on price reduction clause in contract, Provisional assessment request denial, Applicability of legal precedents on refund claim.

Analysis:
The appellants filed an appeal against the rejection of their refund claim, citing a Price Variation Clause in the contract for the supply of explosives as the basis for the claim. They argued that after the goods were cleared, the price was reduced due to the performance of the explosives, making them eligible for a refund of the Excise duty paid at the time of clearance. The appellants relied on Tribunal decisions supporting refund claims based on price variation clauses, even if assessments were not provisional. However, the Revenue contended that there was no price variation clause in the contract, and the price reduction was due to penalties imposed for the explosives not meeting agreed benchmarks.

The Tribunal noted that the contract clauses referred to penalties for explosives not meeting benchmarks, leading to price reductions, rather than a price variation clause. Additionally, the appellants' request for provisional assessments was declined, and they did not challenge this decision. Citing legal precedents, including a decision by the Hon'ble Punjab and Haryana High Court, the Tribunal held that subsequent price reductions without provisional assessments could not be the basis for seeking a refund under Section 11B of the Central Excise Act. The Tribunal also mentioned a previous order dismissing a similar refund claim by the same appellants.

In conclusion, the Tribunal found no merit in the appellants' claim as there was no price variation clause in the contract, and the assessments were not provisional. Relying on established legal positions from the Hon'ble Supreme Court and the Hon'ble Punjab & Haryana High Court, the Tribunal dismissed the appeal, stating that the decisions cited by the appellants were not applicable to the current case's facts and circumstances. The impugned order rejecting the refund claim was upheld, and the appeal was dismissed.