2017 (7) TMI 162

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.... State Electricity Board and also Chittaranjan Locomotive Works. As per the contract the price to be arrived is on the basis of price of PVC issued by Indian Electrical and Electronics Manufacturing Association (IEEMA). In the contract there is a price variation clause for the reason that at the time of clearance of the goods the actual price of PVC is not available. After supply of the goods when the bills are to be finalised the actual price of PVC is ascertained and accordingly the value is adjusted. The respondent in some cases paid the duty in excess, in some cases there is short payment of duty on the date of clearance of the goods when compared with the actual price arrived at on the basis of PVC price. In case of short payment, the ....

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....atever price was charged at the time of clearance of the goods the said price is in accordance with the Section 4 of Central Excise Act, 1944 hence for whatever reason if the price is varied, consequently the duty paid at the time of clearance cannot be varied and no consequent refund arises. He further submits that the Commissioner (Appeals) in his finding did not whisper anything regarding liquidated damages which is different from the price escalation clause; the same cannot be deducted from the price charged at the time of clearance of goods. 4. Ms. Lalita Phadke, ld. Counsel along with Shri H.G. Dharmadhikari, ld. advocate appeared and submits that the Commissioner (Appeals) has given an elaborate finding that they entered into cont....

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....he case. I completely agree with the Commissioner (Appeals) that in case of price variation clause on the basis of raw material cost the final price as per the raw material cost has to be taken as transaction value, therefore, the provisional price on which the goods are cleared from the factory and duty paid thereon is not the final price. Accordingly, if there is any excess payment between the value charged at the time of clearance and value finalised on the basis of price variation clause the excess paid duty, if any arise, is refundable. Since the excess paid duty is on the excess value, which is not the price paid or payable by the customer, the unjust enrichment is not applicable. However, as regards the issue of liquidated damages, t....