2014 (5) TMI 683

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....Dharuhera. Many times on account of certain commercial contingencies there is a variation in Price, in upward or downward direction, after having cleared the said Mufflers from the appellant's manufactory on payment of duty. If there is upward revision of Price, the buyer - M/s Hero Honda Motors Ltd. - had been paying differential Price to the appellant for the past clearances, and in such cases the appellant had been paying central excise duty on the differential Price so received. The Department had no objection to this practice adopted by the appellant. However, during the period of dispute (April to October 2005 & August 2005 to January 2006), the Price was revised downward at a later date subsequent to clearances of Mufflers from the appellant's factory. In this situation, the appellant was bound to refund to the buyer the excess differential Price along with corresponding central excise duty charged/received against its invoices issued at the time of clearance of Mufflers from its factory. After having refunded the excess differential Price amount and corresponding central excise duty to the said buyer, the appellant filed refund claims of the excess paid central excise duty ....

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....rom 01/07/2000. As the clearances of goods are first made at provisional Price, that Price does not represent 'Transaction Value'. The transaction value is finally determined when the provisional Price is finally revised and accounts reconciled at both ends.          (iv) As regards non-observance of the procedure for provisional assessment enshrined in Rule 7 of the Central Excise Rules 2002, he argued that the practice in vogue was in the knowledge of the Department as stated above and the Department never raised any objection to that. The Department never directed the appellant to resort to provisional assessment under the said Rule 7. Moreover, the purpose of the said Rule 7 is to ensure that the Govt. Revenue is not at stake inasmuch as it speaks of a provisional assessment order and execution of a bond. That the objective of the said Rule 7 is otherwise achieved by the appellant's practice inasmuch as the Govt. Revenue had never been at stake for the reason that the appellant had been suo moto paying the differential duty as a law abiding company. It is for this reason that the Department did not raise any objection on this practice ....

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....Ltd. Vs. Commissioner of Central Excise, Pune-I - [2011 (270) ELT 81 (Tri. Mumbai)];           (d) Mauria Udyog Ltd. Vs. Commissioner of Central Excise - [2007 (207) ELT 31 (P&H)];          (e) Hindustan Wires Ltd. Vs. Commissioner of Central Excise, Delhi-II - [2003 (151) ELT 679 (Tri. Del.)]; and          (f) Rajasthan Drugs & Pharmaceuticals Ltd. Vs. Commissioner of Central Excise, Jaipur - [2005 (184) ELT 71 (Tri. Del.)]. 5. Heard both sides and perused the case records. Issue involved in the proceedings is whether appellant is entitled to the refund claims where lower duty is payable on the goods cleared at a price, when subsequently a lower price is settled due to price variations. Both sides have relied upon several case laws in support of their arguments. It is observed that in the case of Nagarjuna Construction Co. Limited Vs. C.C.E. Hyderabad (supra), relied upon by the appellant, there were agreements with the oil companies to the effect that the prices were provisional and the assessee resorted to provisional assessment. Similarly, in ....

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.... to refund the excise duty to the extent of the reduced price. That being so, we see no merit in this appeal brought by the assessee and dismiss the same with no order as to costs. (b) In the case of Mauria Udyog Ltd. Vs. Commissioner of Central Excise (supra), also the Hon'ble Punjab & Haryana High Cour held as under:              7. In the present case, it is not shown that clearance of the goods was made on provisional basis. Once this is so, reduction of price at a later date could not be made foundation for seeking refund. (c ) In the case of Commissioner of Central Excise, Raipur Vs. Blastech (India) Pvt. Ltd. (supra), CESTAT held as under:               8. The provisions of law are very clear to the effect that the assessment of duty is to be on the basis of transaction value as disclosed in the invoices issued at the time of clearance of goods unless there is suppression of correct value in the invoices. It is nobodys case that there was any suppression of the correct value. It is the contention of the assessee that the clearance was on t....