AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1739
X X X X Extracts X X X X
X X X X Extracts X X X X
....and control heads classifiable under Chapter 84 of the Central Excise Tariff Act, 1985.The appellant had effected clearances during the period January 2014 to March 2015 at a price of Rs. 260/- per unit as per purchase orders issued by the buyer M/s Visteon. Subsequently, on account of escalation in raw material costs, the appellant sought to revise the price to Rs. 390/- per unit and issued a supplementary invoice dated 31.03.2015, discharging differential duty amounting to Rs. 47,15,913/-. However, the buyer refused to accept the revised price and declined payment of the differential amount. In these circumstances, the appellant filed a refund claim on the ground that the enhanced price was never realized and therefore duty paid on such differential value is not legally payable. The Department rejected the claim holding that valuation was correctly done under Section 4 and that refund is time barred under the provisions of Section 11B of Central Excise Act, 1944. 2. Aggrieved by the impugned Order, the appellant is before this Tribunal. 3. The Ld. Consultant Shri S. Jayanth appeared on behalf of the Appellant. The Ld. Authorized Representative Shri N. Satyanarayana appeared....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the issues arising for determination in the present appeal, one by one, seriatim. Issue No. (i): Valuation under Section 4 and Refundability of Differential Duty 9.1 The issue for consideration is whether the differential duty paid by the appellant on supplementary invoices, arising from unilateral price revision, forms part of the assessable value under Section 4 of the Central Excise Act, 1944 when such price revision was not accepted and paid by the buyer and consequently whether such duty is refundable. We find that Section 4, as amended with effect from 01.07.2000, adopts the concept of "transaction value", i.e., the price actually paid or payable at the time and place of removal, replacing the earlier concept of "normal price". The legislative intent is to base valuation on the real commercial transaction between the parties and not on any notional or hypothetical value. In terms of Section 4(1)(a), where goods are sold and the buyer and seller are not related and price is the sole consideration, such transaction value shall be the assessable value, and only when these conditions are not satisfied can recourse be made to Section 4(1)(b) read with the Valuation Rules, 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt dealt with a situation where the transaction between the parties was complete at a particular price and the duty incidence had already been passed on to the buyer, and thereafter a downward revision of price was sought to be relied upon for claiming refund. In such circumstances, the Court held that refund is not admissible. However, the present case stands on a fundamentally different footing, inasmuch as the revised price itself was never accepted by the buyer and no additional consideration was ever realized. Therefore, the factual foundation required for application of the said judgment is absent, rendering the same inapplicable to the facts of the present case. We also find that the reliance placed by the Revenue on MRF Ltd. v. Collector of Central Excise 1997(92) ELT 309(SC) is also not applicable to the facts of the present case. In the said decision, the Hon'ble Supreme Court dealt with a situation where the price of the goods stood finally determined and accepted between the parties at the time of clearance, and subsequent variations or discounts were sought to be applied thereafter. The Court held that duty liability is to be determined on the basis of the price prevai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....annot form part of assessable value. In Para 9 of the Order, it has been held that "............. No doubt, the subsequently enhanced value, raised by way of supplementary invoices, if recovered by the assessee from their customers is required to be treated as assessable value and the assessee would have been liable to pay duty on the same. However the question arises that where the efforts made by an assessee to realize some more amount from their customers towards the value of the goods sold by them do not succeed, whether the assessee is required to pay duty on such amount or not. The answer to the above question would be an emphatic 'No'". A similar view has been taken in CCE, Pune-I Versus Faurecia Automotive Seating (India) Pvt Ltd. 2017 (11) TMI 333 - CESTAT MUMBAI, relied upon by the Appellant, wherein in Para 4 of the Order it was held that: - "..........accordingly, value which is paid or payable at the time of removal of the goods was the price which was charged in the main invoice. The supplementary invoice was raised subsequently for the price variations. The said price was not chargeable at the time of the clearance of the goods. Moreover, the cus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, has not accounted the same as purchase in its books of accounts, and has not availed CENVAT credit of the excise duty paid thereon, while also requesting cancellation of the said invoice. This contemporaneous evidence clearly establishes that the differential amount has not been realized by the appellant and that the incidence of duty has not been passed on to the buyer in any manner whatsoever. 10.3 It is further observed that the said amount remains unrealized and is reflected in the books of accounts of the appellant as receivable, and there is no evidence to indicate availment of credit by the buyer. The adjudicating authority has rejected the refund on the ground of unjust enrichment without properly appreciating these facts, whereas the doctrine cannot be applied on presumptions but must be based on evidence. In the absence of any contrary material, it is held that the incidence of duty has not been passed on and the bar of unjust enrichment is not attracted. 10.4 The doctrine of unjust enrichment has been elaborately considered by the Hon'ble Supreme Court in CCE v. Allied Photographics India Ltd. 2004 (166) E.L.T. 3 (S.C.), wherein it has been held that the burden....