Excise refund on later price reduction denied where duty is fixed at clearance and provisional assessment was not invoked.

Excise duty is fixed at the time of removal on the price then prevailing, and a later contractual downward revision of price does not by itself create a right to refund. The Tribunal applied the principle in MRF and held that post-clearance price variation under a contractual clause is not a valid basis for refund. It further held that self-assessment cannot be treated as provisional unless the statutory provisional assessment mechanism is invoked with prior permission of the proper officer. As a result, the limitation plea based on provisional assessment did not assist the assessee, and the refund claim remained inadmissible.

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Issues: (i) Whether refund of excise duty could be granted on the basis of a subsequent downward revision of price under a contractual price variation clause. (ii) Whether the self-assessment could be treated as provisional so as to avoid the limitation applicable to refund.

Issue (i): Whether refund of excise duty could be granted on the basis of a subsequent downward revision of price under a contractual price variation clause.

Analysis: The ruling in MRF held that excise duty liability is determined at the time of clearance on the price then prevailing, and a later reduction in price does not by itself create a right to refund. The Tribunal treated that principle as binding and applicable to a refund claim founded on post-clearance price variation, distinguishing earlier contrary decisions.

Conclusion: The refund claim on the basis of subsequent price reduction was not admissible and failed.

Issue (ii): Whether the self-assessment could be treated as provisional so as to avoid the limitation applicable to refund.

Analysis: Provisional assessment can arise only where resort is had to the statutory mechanism with prior permission of the proper officer. A contractual price variation clause does not, by itself, make a self-assessment provisional. Once the refund was held inadmissible on merits, the objection based on unjust enrichment was also rendered irrelevant.

Conclusion: The assessment could not be treated as provisional and the limitation plea did not assist the assessee.

Final Conclusion: The dismissal of the refund claim was sustained because duty remained payable on the price at the time of clearance and the assessee could not invoke provisional assessment outside the statutory scheme.

Ratio Decidendi: Excise duty liability is fixed at the time of removal on the then prevailing price, and a subsequent contractual reduction in price does not, without statutory provisional assessment, entitle the assessee to refund.

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