2016 (9) TMI 32 - AT - Central Excise

Refund claim - duty paid on differential value - supply of electrical transformers and accessories at contracted price containing a price variation formula - price reduced subsequent to the clearance of goods - Held that - by following the various decisions of Supreme Court and Tribunal the respondents are not entitled to refund. Since the respondents are not entitled to refund the duty paid on differential value calculated by revising the assessable value hence the question of unjust enrichment or otherwise become irrelevant. - Decided in favour of Revenue

Summary

Issues involved:
1. Refund of duty paid on differential value due to price adjustment and delay in delivery.
2. Provisional assessment requirement for refund eligibility.
3. Application of principles of unjust enrichment for refund eligibility.
4. Tribunal's previous decision in appellant's own case regarding refund eligibility.

Analysis:
1. The case involved M/s. Bharat Bijlee Ltd. seeking a refund of duty paid on the differential value of electrical transformers and accessories due to price adjustment as per the IEEMA formula and penalty for delay in delivery. The appellant claimed that the assessable value should be revised to reflect the adjusted price and sought a refund. The issue was whether the refund could be granted in the absence of provisional assessment.

2. The learned AR argued that as per legal precedents, including the Supreme Court's decision in MRF Ltd., a refund cannot be sanctioned if the price is reduced post-clearance without provisional assessment. He cited the case of Mauria Udyog Ltd. where the High Court held that a post-clearance price reduction cannot be considered for a refund without provisional assessment. The principle of unjust enrichment was also invoked by referring to decisions like Gulf Oil Corporation and AK Spintex Ltd.

3. The respondent's counsel argued that the case was similar to the Tribunal's previous decision in the appellant's own case, where the refund was granted. She emphasized that the appeal against the Tribunal's decision in their own case had been dismissed by the High Court. Additionally, she relied on the Tribunal's decision in the case of Universal Cylinders Ltd., affirmed by the Apex Court, to support the respondent's claim for a refund.

4. The Tribunal analyzed the rival submissions and noted that the earlier order in the appellant's own case only addressed the issue of unjust enrichment, not the admissibility of the refund on merits. The Revenue's appeal was based on both merit and unjust enrichment grounds, citing legal precedents like ECE Industries Ltd. and Mauria Udyog Ltd. The Tribunal referred to specific provisions under Section 11B regarding refund claims and the relevant date for claiming a refund. Based on precedents like Tesla Transformers Ltd., the Tribunal concluded that without provisional assessment, a post-clearance price reduction cannot be the basis for a refund. Consequently, the Tribunal allowed the Revenue's appeal, denying the refund to the appellant.

This detailed analysis of the judgment highlights the key legal arguments, precedents, and considerations that led to the Tribunal's decision on the refund of duty paid by M/s. Bharat Bijlee Ltd.