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TMI Blog2011 (7) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... f electric transformers falling under chapter sub heading 8504 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are clearing their final products i.e. transformers on payment of appropriate duty of excise. 4. The appellants entered into a contract with Punjab State Electricity Board (PSEB) for supply of transformers and in terms of the contract, the PSEB placed purchase order No. 2012/SPEC-1793/DS-8209/S-II dt. 22.09.2006 on the appellants for supply of 16 transformers during the period from November 2006 to March 2007. The price of transformer was agreed at Rs. 1,47,00,000/- per transformer, subject to price variation clause. 5. The appellants in terms of their invoices supplied 16 transformers initially valued at Rs. 23,52,00,000/- involving basic excise duty of Rs.3,76,32,000/- plus Education Cess of Rs. 7,52,640/- and SHE Cess of Rs. 94,080/-, (total central excise duty of Rs. 3,84,78,720/-). Thus, the appellants paid a total excise duty of Rs. 3,84,78,720/-. However, according to appellants, total price paid by PSEB was Rs. 22,63,97,210/- on account of reduction thereof in terms of price variation clause. The total excise duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract read thus:- 4.1 The prices of transformers units mentioned under clause 1.1 are VARIABLE with base dated 01.06.2006 as per IEEMA price variation any positive/ negative ceiling. Price Variation shall be made on corresponding rates of variable elements prevailing on the first working day of one month before dispatch or date of contractual delivery, whichever is earlier . In accordance with the Price Variation Clause, the prices were reviewed and approved at Rs. 22,63,97,210/- and accordingly, excise duty amounting to Rs. 3,69,48,025/- (BED : Rs. 3,62,23,552/- plus Ed. Cess of Rs. 7,24,471/- plus SHE Cess of Rs. 86,168/-) was paid to the appellants. Thus, though the appellants actually paid to the department a central excise duty of Rs. 3,84,78,720/-, the appellants recovered the excise duty only to the extent of Rs. 3,69,48,025/-. If SHE Cess of Rs. 86,168/- is included, it works out to Rs. 3,70,34,191/-. Thus, there is factually an excess payment of excise duty to the tune of Rs. 14,44,529/-. This is the amount which was claimed by the appellants before the Assistant Commissioner which was refunded to them. In view of the above, the appellants factually paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him . 9. It is incorrect that the appellants reduced the price by issuing credit notes. The prices were reduced by the buyer unilaterally in terms of the price variation clause contained in the purchase order. Accordingly, the prices were reduced and the appellants were paid value to the lesser extent and the excise duty on the goods was also reimbursed to the less extent. In other words, the value was reduced to Rs. 22,63,97,210/- and the excise duty was reduced to Rs. 3,69,48,023/-. This in turn means that the excise duty paid by the appellants was not reimbursed to them by the buyers to the extent of Rs. 14,44,529/-. In other words, the excise duty of Rs. 14,44,529/- was borne by the appellants themselves and has not been passed on the buyers. Therefore, the appellants are entitled for the refund of Rs. 14,44,529/- and the same is liable to be refunded. 10. The appellants submit that the Commissioner (Appeals) has failed to appreciate the evidences on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter is apparently that whether the appellants are entitled for refund of the duty amount equivalent to the difference in the amount of duty payable on the amount of transaction disclosed in the invoice and the amount actually received by the assessee as the price for the produce sold under such invoice. As already pointed out above, it is the case of the appellant that though ex-price was mentioned in the invoices at the time of clearance of the goods and accordingly the duty was paid factually the appellants received less amount consequent to the variation of the price on the strength of price variation clause in the agreement between the assessee and the supplier and, therefore, less duty was payable and hence the differential amount in the duty paid and payable is required to be refunded to the appellants. 13. The appellants have not pointed out any specific provision which would entitle the appellants to seek such refund except pointing out Section 11B of the said Act. Section 11B(1) provides that any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is revealed that there was excess payment of duty at the time of provisional payment of duty apart from the said provision none of the other provision disclose a situation which could cover the factual matrix of the case in hand. There is no provision under the Act where it is provided that inpite of payment of duty in terms of the price disclosed in the invoices at the time of clearance of the goods if subsequently lesser amount is received by the manufacturer in relation to such goods then the manufacturer would be entitled for reduction in the duty liability in relation to such goods and on that count for refund of the difference in the amount of duty. The fact that there is no such provision under the statute is not in dispute. The contention however is that the authority has no power to recover the amount in excess of duty legally payable. Since the price variation clause empowers the buyer to reduce the price subsequent to the clearance of the goods and actually the price is reduced, therefore, the manufacturer is entitle for refund of the difference between the amount actually paid and amount becoming payable in terms of modified price. The contention is devoid of subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ievable that a manufacturer would value their product that is over and above the value which ought to have been calculated for the purpose of payment of duty. In case of payment of duty or tax, there is no question of any voluntariness, it is always imposed upon the assessee. Being so, there is no presumption that the product can be overvalued. 16. Bearing in mind the above facts and the provisions of law, therefore, it is difficult to accept that on account of variation of price on the lower side by the buyer after the clearance of the product that could evade or in any way result in variation of the valuation of the product for the purpose of determining the duty liability at the time of clearance of the goods. Such a variation of price or lesser payment of price subsequent to the clearance of the goods either on account of some agreement between the manufacturer and the buyer which has no sanction under the statute dealing with the duty liability can be of no help to the assessee to claim refund. 17. As regards the contention about non applicability of principles of unjust enrichment it is difficult to accept the same as in any case when the party prays for refun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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