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TMI Blog1995 (7) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... passed an adjudication order dated 26-9-1989 in the matter holding that the appellants were ineligible for the exemption on the abovesaid ground. Thereafter, the appellants started, paying duty under protest during the year 1989-90 and 1990-91. They also filed appeal against the Collector s order before the Tribunal which was allowed by the Tribunal order No. 41 to 46/91-C, dated 14-1-1991 and the Tribunal held that the clearances were not to be clubbed and the appellants were eligible for the exemption under Notification No. 175/86. Appeal filed by the Department against the Tribunal order was dismissed by the Hon ble Supreme Court on 21-9-1992. On this ground the appellants filed refund claim of the duty paid by them under protest during 1989-90 and 1990-91. The amounts of refund claim were Rs. 8,08,172.68 in the case of M/s. Masiha Medica Pvt. Ltd., Rs. 9,63,500.04 in the case of appellants M/s. Sinkhai Synthetics Chemicals Pvt. Ltd. and Rs. 7,53,803.64 in the case of M/s. Vivomed Laboratories Pvt. Ltd. Show Cause Notices were issued to the appellants by the jurisdictional Assistant Collector for rejecting the refund claim alleging that the discount which the appellants gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormal price in the price lists filed from time to time hence the Assistant Collector was of the view that the prices shown in gate passes ought to be compared with the gross prices shown in the invoices and not the net prices after allowing discounts. For these reasons, the Assistant Collector has held that mere maintenance of constant selling price cannot be taken as conclusive proof that the incidence of duty was not passed on to the buyers. The Assistant Collector further noted that during relevant period the Profit and Loss account showed them to be making profit in their business which supported the conclusion that the incidence has been passed on to the buyers. The Assistant Collector was not impressed by the submissions of the appellants that the duty paid under protest shown as loans and advances in their Balance Sheet as part of the current assets is evidence of the incidents of duty being borne by the appellants. The order of the Assistant Collector in all these cases was upheld by the Collector (Appeals). The Collector (Appeals) observed inter alia in his order since this constant price was always taken as a cum duty price and assessable value was worked out backwards d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad of profits. The learned Counsel contended that the appellants had paid the duty out of their own resources and in fact they have approached their Banker for bridge loan to provide for the payment of duty. He referred to correspondence in this regard with their bankers. The Bank, however, refused such loans and, therefore, the appellants had to meet payment of duty out of their own resources. The learned Counsel further argued that the discount have been availed of by them in their price lists in terms of Section 4(4)(d)(ii) of Central Excises and Salt Act, 1944 and the price lists showed their net price after allowing discount. The learned Counsel pleaded that at any rate, an issue of discount is not an issue in the present proceedings. The learned Departmental Representative Shri J.P. Singh referred to the grounds taken in the show cause notice and the findings of both the lower authorities which clearly bring out the facts that the present situation is clearly covered by the provisions of Section 11B of the Central Excises and Salt Act, 1944. The appellants herein had never disclosed the discount given in their price lists as both the authorities below have clearly brought out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the relevant statutory documents. (See in this context Tribunal decision in ICEM Engineering Co. v. Collector of Central Excise, reported in 1989 (44) E.L.T. 744 (Tri.) = 1989 (14) ETR 803. Hence such payment of duty cannot be equated to provisional assessment as now sought to be done by the appellants herein. The adjustment of excess amount on finalisation of assessment is envisaged only under Rule 9B covering provisional assessments and such assessments can only be made by the proper officer and for the reasons given under the Rule and on following the procedure laid down therein. Assessment cannot be made provisional because the assessee anticipates to pay lower rate of duty. As observed by the Supreme Court in the case of Oswal Agro Mills v. Assistant Collector of Central Excise, reported in 1994 (70) E.L.T. 48, Section 11B applies when an assessee claims refund of excise duty. A claim for refund is a claim for repayment. It pre-supposes that the amount of the excise duty has been paid over to the excise authorities. It is then that the excise authorities would be required to repay or refund the excise duty. The Supreme Court was setting out the scope of amended provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department. Therefore even if invoice price remained the same duty was charged from customers. The show cause notice issued in this regard alleges that from the Gate Passes and invoices and other documents the duty has evidently been passed on to the buyers. Annexure to the show cause notice elaborates this to show invoice price is more than gate pass price (assessable value plus duty) after giving productwise the assessable value, duty, the total thereof, and the invoice price. However, the appellants explained that such fixed constant price of products is normal in pharmaceutical industry. They have pointed out that the Department has wrongly compared the sum of the assessable value and excise duty paid with the wholesale price charged by appellants buyers to their customers. According to them a comparison can only be drawn between the net price recovered by the appellants in their invoices and the selling price declared by them in the approved price list which forms the basis of calculation of excise duty. They have in their reply to show cause notice given a chart on this basis to indicate that the net price realised in their invoices is less than the selling price declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities as noted above. But the relevant price lists are not before us. We find that the Collector (Appeals) has also observed in his order, The appellants were asked to give copies of circulars by which these discounts were allowed to the customers and the original copies of the invoices but they failed to give copies ....... Therefore the admissibility of these discounts and the fact that they were really passed on cannot be commented upon. Similarly, appellants were asked to disclose the invoice price prevailing prior to issue of show cause notice to see if really there was any change in prices, but the appellants failed to do this also." In the circumstances, it is felt that it would be more appropriate for the appellants to establish their claim with reference to the maintenance of constant prices by furnishing the required invoices alongwith other relevant documents such as price list before the Collector (Appeals). They could also use the opportunity to elaborate on their reply to the show cause notice with reference to their chart annexed thereto which according to the appellants would show net invoice realisation is less than selling price declared in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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