2024 (4) TMI 3 - AT - Central Excise

Refund denied for excess duty paid when sale prices reduced after factory clearance under Central Excise Valuation Rules

CESTAT Bangalore dismissed appeals challenging refund denial of excess duty paid. The appellant transferred goods to depots and later negotiated reduced ... Refund of the excess duty paid - whether subsequent negotiation of the prices can be the basis for reopening the assessment? - HELD THAT:- The appellant has adopted a selling price to the stock transferred goods on the basis of the sale from depots at or to the nearest time of its removable from the factory. The learned Commissioner (Appeals) while setting aside the order of the adjudicating authority allowing refund claims of the excess duty paid on account of subsequent negotiation of the sale price from depots, observed Allowing refund in these cases amounts to reassessment of goods, which were already assessed finally by the respondent at the time of clearance of goods from factory. The refund amount is determined and sanctioned without any authority of law. The observation of the learned Commissioner (Appeals) is in line with the opinion expressed by this Tribunal in the case of Finolex Cables Ltd. [2011 (3) TMI 414 - CESTAT, MUMBAI] wherein it is held that In the instant case, the appellant-assessee has discharged duty liability accordingly. Subsequent change in prices effected by the appellant at the depot does not affect the assessable value already determined and on which duty liability has been discharged. If that is allowed, the very object and purpose of Rule 7 of the Central Excise Valuation Rules will be totally defeated. There are no reason to interfere with the order of the learned Commissioner (Appeals) - the impugned order is upheld - appeals filed by the appellant are dismissed. Issues involved:The issue involved in this case is whether the refund of excess duty claimed to have been paid by the appellant is admissible or not.Summary:Issue 1: Refund of excess dutyThe appellant filed refund claims for excess duty paid due to subsequent negotiation of sale prices from depots. The adjudicating authority sanctioned the refund, but the Revenue appealed. The main contention was whether the excess duty paid is refundable. The appellant argued that excess duty refunded by the authority should be allowed, citing relevant case laws. The Revenue argued that subsequent redetermination of prices without provisional assessment is not in accordance with the valuation rules. The Tribunal found that the appellant cleared goods on stock transfer basis using depot prices, and subsequent negotiation should not affect the assessable value already determined.Issue 2: Legal interpretationThe Commissioner (Appeals) set aside the order allowing refund claims, stating that subsequent price changes from depots do not impact the duty already paid. Refund in such cases amounts to reassessment of goods already assessed finally. The Tribunal agreed with this interpretation, citing a case involving price reduction after goods clearance. The Hon'ble Madras High Court also held that the prevailing price at the depot on the date of clearance should be considered for assessment, not subsequent prices. Based on these precedents, the Tribunal upheld the Commissioner's decision, dismissing the appeals filed by the appellant.In conclusion, the Tribunal found that the excess duty claimed by the appellant is not admissible for refund, as subsequent negotiation of prices should not impact the duty already paid. The decision was based on legal interpretations and precedents, leading to the dismissal of the appeals.