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2013 (10) TMI 1312 - AT - Central ExciseDenial of refund claim - Provisional assessment - Unjust enrichment - Issue of credit notes and cheques - Held that:- It is settled law that quantity discount cannot be treated as part of transaction value at the time of removal, even though the quantum and eligibility thereto is determined at a later date. - even in cases where there is a subsequent reduction in price pursuant to a price variation clause in an agreement between the buyer and seller, the assessee was required to discharge duty only at the reduced price and that whether the assessment is provisional or not is not at all relevant. - both the price and the rate of quantity discount offered are admittedly constant, as known at the time of clearance and hence, there is no change in price, but merely a discounted price on fulfilment of the pre-condition for availability of the discount. - rejection of the refund claims on merits is contrary to well settled law and therefore not legally sustainable. When the refundable amount collected initially by the buyer is returned by way of credit notes, refund cannot be denied by invoking the bar of unjust enrichment - assessee has created a situation whereby, there would be only refund claim to be made on the basis of actual quantity discount that is passed on by way of credit notes. The assessee is not passing on the quantity discount by determining it in advance and pay the differential duty where the dealer is not eligible. In case like this, if the assessee were to approach the department for provisional assessment, the Additional Commissioner/Deputy Commissioner would have normally refused to allow provisional assessment since there is no differential duty payable and there is no need for any security or cash deposit since there is no question of any differential duty demand that may arise as a result of provisional assessment. This is a case where the assessee knows definitely there would be only a refund claim since the assessee is paying duty without allowing any quantity discount and therefore only a reduction in the transaction value would occur and consequently only refund claim will arise. The scheme of the act has already been discussed and this would show clearly that this is not what the law proposes. What the appellant has done is that appellant has not passed on the quantity discount to the dealers initially and only at the end of the month the benefit is passed on in the form of credit notes. We all are aware that the first stage dealer or a second stage dealer can pass on the excise duty paid as Cenvat credit to the customer who can take it and utilize the same for payment of duty and final product. It is nobody’s case that paper is sold only to consumers who cannot take credit. No doubt the provisions of Section 11B do not contemplate verification as to whether a buyer has passed on the credit or not. - law does not contemplate any verification down the line because only the person who has suffered the duty has to claim the refund. In the situation created by the assessee in this case, a dealer might have passed on the duty liability to the customer or might have even passed on the amount of duty paid as Cenvat credit if the goods purchased from the appellant has already been sold by the dealer in the course of the normal trade. Even if provisional assessments were to be resorted to, the assessee may not be eligible for refund in view of the fact that no assessee can be allowed to create a situation where unjust enrichment of any person is possible as per the decision of the Hon’ble Supreme Court [1995 (5) TMI 28 - SUPREME COURT OF INDIA], since the same is not required, we are not going into further detailed discussion on this aspect and would not like to give it as our conclusion - even if provisional assessments were to be resorted to, the assessee may not be eligible for refund in view of the fact that no assessee can be allowed to create a situation where unjust enrichment of any person is possible as per the decision of the Hon’ble Supreme Court, since the same is not required, we are not going into further detailed discussion on this aspect and would not like to give it as our conclusion. - appellant has not made out a prima facie case for waiver or stay against recovery. Therefore, the appellant is directed to deposit the entire amount of refund sanctioned to them and demanded back within eight weeks - Decided against assessee.
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