Tribunal allows appeal, grants refund for differential duty on HDPE bags, no unjust enrichment.

The Tribunal allowed the appeal by M/s. Utkal Polyweave Industries (P) Ltd., setting aside the rejection of their refund claim for the differential duty amount of Rs. 81,729/- due to a reduction in the price of HDPE bags. The Tribunal held that the reduced price should be considered as the assessable value, and there was no unjust enrichment as the duty was not passed on to the buyer. The Tribunal distinguished this case from a previous Supreme Court judgment and directed verification by the Assistant Commissioner before sanctioning the refund.

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Issues involved: Appeal against rejection of refund claim for differential duty due to reduction in price of HDPE bags.

Summary:
1. The appeal arose from the rejection of a refund claim by M/s. Utkal Polyweave Industries (P) Ltd. for an amount of Rs. 81,729/- due to a reduction in the price of HDPE bags.

2. The appellant, a rate contract holding SSI Unit, had a contract with M/s. Hira Cement Works for supply of HDPE bags at a fixed rate, which was later reduced with retrospective effect. The appellant filed a refund claim which was rejected by the Assistant Collector and the Collector of Central Excise (Appeals) citing lack of agreement for refund in case of price reduction.

3. The appellant argued that the final approval of price by the Assistant Collector should not be a ground for rejection, citing provisions of Section 4(1)(a)(ii) of the CEA, 1944. They contended that the reduced price should be considered as the assessable value and there was no unjust enrichment as the buyer refused to pay the higher rate.

4. The Revenue, represented by Shri V.K. Chaturvedi, supported the lower authorities' decision.

5. The Tribunal observed that the rate contract prices fixed by the Government of Orissa were approved as the assessable value, but the appellant was entitled to the refund as the reduction in price was not voluntary and the duty was not passed on to the buyer. The Tribunal distinguished the present case from the judgment of the Hon'ble Supreme Court in MRF Ltd. v. C.C.E., Madras.

6. Consequently, the Tribunal set aside the impugned order and allowed the appeal, subject to verification by the Assistant Commissioner that the duty was not passed on to M/s. Hira Cement Works before sanctioning the refund.

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