2017 (8) TMI 1159 - AT - Central Excise

Refund claim appeal dismissed for depot sales under Central Excise Valuation Rules

M/s. Greaves Cotton Ltd. Versus Commissioner of Central Excise, Chennai-I

The appeal against Order-in-Appeal No.70/2005 (M-I) by M/s. Greaves Cotton Limited, regarding a refund claim for the period from April 2003 to March 2004, ... Refund claim / Demand of differential duty - sale of products from Depot - excess paid duty for goods sold from Depot - Held that: - there was no provisional assessment during the relevant period - the appellants are not required to pay differential duty in cases where goods have been sold at higher prices from the depot. Like-wise, in cases where goods are sold at lower prices from the depot, the appellants will not be eligible for any refund - appeal dismissed - decided against appellant. Issues:- Appeal against Order-in-Appeal No.70/2005 (M-I), dated 25.07.2005.- Provisional assessment by M/s. Greaves Cotton Limited.- Refund claim for the period from April 2003 to March 2004.- Show-cause notice rejecting the refund claim.- Order-in-Original No.8/2005 rejecting the refund claim.- Challenge before Commissioner (Appeals) without relief.- Grounds of appeal related to provisional assessment continuation and differential duty refund entitlement.- Interpretation of Central Excise Valuation Rules for depot sales.- Decision on differential duty payment and refund eligibility for goods sold at depot.Analysis:The case involved an appeal against Order-in-Appeal No.70/2005 (M-I), dated 25.07.2005, by M/s. Greaves Cotton Limited, engaged in manufacturing machinery falling under Chapter 84 of Central Excise Tariff Act, 1985. The appellants opted for provisional assessment from 1993, which was finalized up to 1998-99. They closed their unit from 1999 to 2001 and resumed production in September 2001. A refund claim of Rs. 79,539/- for the period from April 2003 to March 2004 was filed, along with differential duty payment of Rs. 1,29,321/-. A show-cause notice was issued to reject the refund claim based on Central Excise Act, 1944 and Central Excise Valuation Rules. The Order-in-Original No.8/2005 dated 25.01.2005 rejected the refund claim, leading to a challenge before the Commissioner (Appeals) without success.The main grounds of appeal focused on the continuation of provisional assessment and the entitlement to a refund of differential duty for goods sold at depot. The bench considered the amended Central Excise Valuation Rules applicable from 01.07.2000, specifically Rule 7 for depot sales. It was clarified that under this rule, goods cleared from the factory are charged duty based on depot rates, with no obligation for differential duty payment or refund if goods are subsequently sold at higher or lower prices from the depot. The Commissioner (Appeals) had detailed findings supporting this interpretation, noting the absence of provisional assessment during the relevant period. Therefore, the bench upheld the impugned order, dismissing the appeal. The decision was pronounced on 15.06.2017.