2008 (2) TMI 143 - AT - Central Excise

Revenue's Appeal Dismissed on Refund Claim for Price Reduction; Timely Filing Emphasized

The Tribunal dismissed the Revenue's appeal regarding a refund claim based on price reduction, citing case laws and emphasizing timely filing of refund ... Price variation clause – provisional assessment – refund claim filed with in prescribed time limit, when price lowered later on - whether the assessment is provisional or not is not at all relevant in this case, because when the refund claim has been filed within the time limit even if the assessment is final, one has to examine the refund claim - question of the assessment being final or provisional is not relevant where the refund claim has been filed within the time limit – refund allowed Issues:1. Refund claim rejection based on price reduction.2. Compliance with Rule 9B of Central Excise for refund claims.3. Provisional assessment impact on refund claims.4. Timeliness of refund claim filing.5. Applicability of case laws in determining liability.Analysis:1. The appellant filed a refund claim of &8377; 4,05,883/- due to price reduction by buyers, which was rejected by the Original Authority. The Commissioner (Appeals) allowed the appeal based on case laws, leading to the Revenue's appeal. The Revenue contended that compliance with Rule 9B is necessary before claiming a refund for provisional assessment. Reference was made to the Rajiv Mardia and MRF Ltd. cases emphasizing liability for excise duty despite price fluctuations post-clearance.2. The learned Advocate argued that the absence of price fixation in the contract makes the assessment non-final, citing the Telephone Cables Ltd. and Utkal Polyweave Indus. Pvt. Ltd. cases. He further contended that non-compliance with Rule 9B does not conclusively determine provisional clearance, referencing the Rajiv Mardia case.3. The issue of provisional assessment's relevance was debated, with the respondent highlighting that a timely refund claim under section 11B should be considered regardless of provisionality. Various case laws like Keltch Energies Ltd. and Indian LPG Cylinders were cited to support this argument, distinguishing the Revenue's stance.4. Upon careful consideration, it was established that the price variation clause in the agreement made the price provisional, leading to a lower duty liability upon price revision. The timely filing of the refund claim rendered the assessment's finality irrelevant. The Tribunal emphasized the importance of considering refund claims within the time limit, irrespective of the assessment's nature, in line with relevant case laws.5. The Tribunal dismissed the Revenue's appeal, noting the applicability of cited case laws and distinguishing the MRF decision. The impugned order was deemed legal and proper, affirming the respondent's entitlement to the refund claim. The decision was pronounced in open court at the conclusion of the hearing.