TMI Blog1997 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... taking credit of the duty paid on specified inputs and utilising the credit for payment of duty on the finished products. Clearances were made during the disputed period on payment of duty on the approved value. 2. On becoming familiar with the implications of the Modvat scheme, it was felt that since the duty paid on the inputs was given credit of to the appellant, to that extent the cost of raw materials was reduced and, therefore, the reduction should be reflected in the cost of the final product by virtue of the price variation clause and after discussion with the appellant, price was reduced by an amount equal to the amount of Modvat credit availed on the relevant inputs. On the difference between the original price and the reduced price, appellant was issuing credit notes in favour of the buyer. Thus in effect and substance, in respect of the clearances made during the disputed period, the ruling price was not the approved price but the price reduced subsequently. It appears for the subsequent periods appellant filed revised price lists reflecting the reduced price and the same had been approved by the Department. In regard to the disputed period also, appellant filed revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scalation clause in the contracts. 5. Learned counsel for the appellant has placed reliance on the decision of learned single Judge of the High Court of Bombay in Writ Petition No. 261/76 in Premier Automobiles Ltd., Bombay v. Union of India and Others - 1987 (30) E.L.T. 71 (Bom.). In that case appellant was obliged to sell Fiat cars at price controlled by Government of India on the basis of which price list was filed. Meanwhile, there was an unsuccessful attempt on the part of the appellant to persuade the Government of India to allow enhancement of price and the appellant was obliged to approach the Supreme Court. The price lists submitted and invoices issued during the pendency of the appeal before the Supreme Court contained specific averment to the effect that the prices are subject to the decision of the Supreme Court and in case the prices were allowed to be increased, such increased prices would govern the transactions under the price lists and the invoices and the buyers would be obliged to pay the difference in the price. Ultimately, appellant was allowed to increase the price and the appellant collected the difference in price to the customers by issuing debit notes. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproved the above reasoning in the following words :- The learned single Judge was right in concluding that the assessments were final and complete to the extent that they were made on the footing that the price charged by the Company was merely provisional and the invoices issued by the Company contained the representation that the price was not final but merely provisional. Indeed, the endorsement inserted in the invoice clearly sets out that the final bill would be preferred only after the decision of the Supreme Court. It is not in dispute that, both the appellants and the Department, were aware of the fact that the final price was dependent on the decision of the Supreme Court. It cannot be ignored that the Department could not have completed the assessment by taking into consideration any price in excess of the price fixed under the Price Control Order, and, therefore, the mere fact that the assessment orders were final would not shut out the Department from claiming the additional duty. The Court further held that the demand was covered not by Rule 10 of the Central Excise Rules, 1944 but under Rule 10A of the Rules, a residuary provision and, therefore, the question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and approved, but is seeking refund of duty paid on account of retrospective reduction of price, the bar of limitation cannot stand in his way, since the approval of the price list in that regard must be regarded as provisional. This would also apply to the Department where on account of the implementation of the price variation clause, the price is raised or increased and the variation takes place long after the payment of duty, it will be open to the Department also to treat the approval granted as provisional and realise the differential duty according to law, without being hampered by the limitation clause in Section 11A of the Act. This, it appears to us, is what follows from the principle laid down by the High Court of Bombay. 8. Since the purchase orders contain price variation clause depending on the price variation of raw materials also and copies of the purchase orders and contracts were submitted along with the price lists, we are inclined to take the view that the prices agreed and the prices declared were provisional, inasmuch as they were subject to the price variation clause. The provisionality also attaches to the approval granted to the price lists. Going by th ..... 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