1997 (5) TMI 187 - AT - Central Excise

Tribunal grants appeal, orders fresh decision & potential refund for excess duty paid

The Tribunal allowed the appeal, setting aside the lower authorities' decisions and remanding the case for a fresh decision. The appellant was granted the ... Valuation - Price List - Refund - Limitation Issues Involved:1. Finality of price list approval.2. Bar of limitation u/s 11B of the Central Excise Act, 1944.3. Provisional nature of assessments.4. Merits of the dispute regarding price reduction.5. Impact of Modvat scheme on price reduction.Summary:1. Finality of Price List Approval:The lower authorities erred in holding that the final approval of price lists barred the filing of revised price lists. This view was contradicted by the High Court of Calcutta in ITC Ltd. v. Union of India and other Tribunal decisions, which allowed for revised price lists even after initial approval.2. Bar of Limitation u/s 11B of the Central Excise Act, 1944:All refund claims were filed more than six months after duty payment, making them prima facie barred by limitation u/s 11B. The appellant argued that the price escalation clause made the assessments provisional, thus exempting them from the limitation period. However, the lower authorities rejected this, citing the absence of specific recitals in the price lists or invoices.3. Provisional Nature of Assessments:The appellant relied on the Bombay High Court's decision in Premier Automobiles Ltd. v. Union of India, where assessments were deemed provisional due to a pending Supreme Court decision. The Tribunal found that the contracts in the present case contained a price escalation clause, and the price lists were accompanied by these contracts. Thus, the approval of price lists was provisional, and the limitation period did not apply to refund claims based on retrospective price reductions.4. Merits of the Dispute Regarding Price Reduction:The lower authorities did not address whether there was a genuine downward price revision due to the price variation clause. The Tribunal noted that this aspect needed examination by the lower authority.5. Impact of Modvat Scheme on Price Reduction:The introduction of the Modvat scheme allowed the appellant to take credit for duty paid on inputs, reducing the effective cost of raw materials. This reduction should be reflected in the final product price. The Tribunal held that if there was a genuine retrospective price reduction, the appellant was entitled to a refund of excess duty paid. The reduced price would be considered the price at the time of removal, despite being determined later.Conclusion:The Tribunal set aside the impugned orders and remanded the case to the jurisdictional adjudicating authority for a fresh decision, allowing the appellant to present records and have a personal hearing. The appeal was allowed.