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TMI Blog2006 (8) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... and dealt with them in his arguments. 3. Appeal No. E/5176/04 has been filed by the appellant Indian LPG Cylinders challenging the order of the Commissioner (Appeals) dated 5-7-2004 upholding the Order-in-original dated 30-1-2003 by which the Deputy Commissioner rejected refund claim of Rs. 6,69,066/- made by the appellant. This appellant had supplied gas cylinders to Bharat Petroleum Corporation Limited (BPCL) from 1-7-1999 to 31-10-2000 on a provisional contract price. BPCL had thereafter revised the provisional price by their letter dated 31-10-2000 with effect from 1997. The appellants, therefore, preferred refund claim by their letter dated 21-8-2002 claiming refund of duty of Rs. 6,69,066/-. The department thereafter issued show cause notice dated 18-9-2002 requiring the appellants to show cause as to why their refund claim should not be rejected on the ground that the appellant was well aware of the fact and it should have made a request for provisional assessment since price was subject to change in future and that the claim for the entire period filed on 27-8-2002, being after a lapse of more than one year from the date of the invoice, was tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establish the co-relation that the amount deducted by the BPCL related to invoices under which excess duty was paid. It was found that the assessee was duty bound to make a request for provisional assessment under Rule 9B and that not being done, the claim could not be entertained. He relied upon the ratio of the decision in A. Infracture Ltd. v. CCE. Jaipur, reported in 2000 (117) E.L.T. 583, in support of this conclusion. He also relied upon the decision in the case of Rajasthan Cylinders & Containers Ltd. v. CCE, Jaipur, reported in 2004 (166) E.L.T. 474, holding that discussing the identical issue, the Tribunal has held that mere mention in the RT-12 return that there is provisional assessment, does not make the assessment provisional. The Tribunal rejected the appeal on the basis of the decision of the Apex Court in Metal Forgings case reported in 2004 (166) ELT-474 (sic) in which it was observed mere mention in RT-12 return that there is a provisional assessment in respect of the specific invoices, does not make the assessment provisional and there has to be an order under Rule 9B of the Rules and material to show that the goods were cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the invoices in question showed the realization of excise duty by the appellant on higher rates i.e. at the rate which was paid and the appellant has failed to prove that higher duty so charged from HPCL had subsequently been refunded to them as a consequence of downward revision of prices. It was held that in the present case, it was nowhere submitted that they had not passed on the full incidence of duty and that it was not a case of unjust enrichment. The refund claim was, therefore, rejected. The Commissioner (Appeals) by his order dated 5-7-2004 held that this case was not a case of provisional assessment and that the decision of the Tribunal in Telephone Cables Ltd. v. CCE, reported in 2003 (154) E.L.T. 237 on which the appellant had placed reliance, was to be considered as over-ruled in view of the Larger Bench and the Supreme Court decisions, referred to, by him. It was also held that undisputedly, the appellant has not produced any documents evidencing that the case was not hit by the provisions of unjust enrichment. The appeal was, therefore, dismissed. 5. In Appeal No. E/5178/04, the same appellant Tirupati LPG Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date of payment of duty. 6. It will be noticed that in all these three appeals, the common contention of the appellants was that since there was price variation clause in the contract and the transactions had taken place on the basis of the provisional price, the assessment should have been treated as provisional and, therefore, when the prices by the oil companies came to be fixed, the appellants became entitled to claim refund on the basis of such downward variation which was made in their respective cases. According to the appellants, the Commissioner (Appeals) had erroneously relied upon the decision of the Tribunal in Rajasthan Cylinders and Containers Ltd. v. CCE, reported in 2004 (166) E.L.T. 474 and the decision of the Apex Court in Metal Forgings (Supra). It was contended that the Deputy Commissioner had earlier on 13-2-2001 informed the appellants that refund claims were premature as the sale price of cylinder given by the IOC, HPCL and BPCL were provisional and had directed the appellants to file their refund claim on finaiization of the prices. It is contended that the letter of the Deputy Commissioner dated 13-2-2001 should be treated as an order under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases, the assessments were finalized on the basis of the returns filed by the appellants for the respective periods. He, therefore, submitted that no refund could be claimed on the basis of downward revision of price pursuant to the price variation clause. He also submitted that by virtue of Section 12B, there was presumption that full incidence of duty has been passed on to the buyer by the appellants and, as held by the authorities, it was not established that excess amounts recovered by way of excise duty were returned by the appellants to the oil companies by any process, such as, deduction in future bills. It was finally submitted that the authorities below have rightly held the refund claim filed beyond one year of the payment of duty as time barred. 8.1 The learned Authorized Representative for the department relied upon the following decisions in support of his submissions :- (a) The decision of the Tribunal in Jay Prestressed Products Ltd. v. CCE, Lucknow, reported in 2001(131) E.L.T. 123 ( Tri.-Del.) was cited to show that where the assessee has not requested for provisional assessment, the Tribunal rejected the contention that the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. CCE, Cochin, reported in 2004 (172) E.L.T. 33 (Tri.-Bang.), was cited to point out that the Tribunal upheld the decision in Telephone Cables Ltd. v. CCE. Chandigarh (Supra) rendered without any reference to the decision of the Apex Court in MRF Limited v. CCE. Madras, reported in 1997 (92) E.L.T. 309 (S.C.) and it was not in consonance with law laid down by the Apex Court. The Tribunal, therefore, following the judgment rendered in CCE, Nagpur v. Maharashtra Cylinder Ltd., reported in 2003 (157) E.L.T. 688 and decision of the Tribunal in MRF Ltd. (Supra), held that the claim of the appellant was rightly rejected on the ground that there was no provisional assessment and subsequent reduction in the price cannot be a subject of refund. (f) The decision of the Supreme Court in Metal Forgings v. Union of India, reported in 2002 (146) E.L.T. 241 (S.C.), was cited for the proposition that to establish that the clearances were made on a provisional basis, there should be first of all an order under Rule 9B of the Rules and then material to show that the goods cleared on the basis of said provisional basis, and in payment of duty was also made on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers were informed by the Corporation by its communication dated 31-10-2000 that the price of LPG cylinder maintained provisional was revised to Rs. 645/- with effect from 1-7-1999 and, accordingly, there was a recovery of differential amounts from their bills and final adjustments would be made later on after finalization of the cylinder price. However, from 1-11-2000, the said price of Rs. 645/- per cylinder was to be the provisional basic price. Thus, the price of LPG cylinder was reduced to Rs. 645/- with effect from 1-7-1999, and appellant Indian LPG Cylinders by communication dated 29-1-2001 addressed to the Deputy Commissioner, made a refund claim of Rs. 7,95,796/- being an amount of excise duty deducted from their bills due to reduction in sale price in respect of 97525 LPG cylinders supplied to the BPCL for the period from 1-7-99 to 31-10-2000. It will be noticed that in the said communication, it was stated that refund claim was filed within the stipulated time under Section 11B of the Act. There was no mention of any provisional assessment in the said communication. The said appellant received a reply dated 13-2-2001 that the refund claim was premature as sale price was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the decisions rendered in the context of the approved provisional price list when the classification and prices lists were required to be filed by the assessee-appellant cannot help the assessee, because that requirement was not in existence when this communication is alleged to have been sent on 29-1-2001 and it was incumbent upon the appellants to follow procedure of Rule 9B of the said Rules of 1944 and Rule 7 of Rules 2002 which admittedly has not been done. 11. Rule 9B of Rules, 1944 was in force till 30-6-2001 and from 1-7-2001, Central Excise (No. 2) Rules, 2001 came into force and under the said new Rules, topic of provisional assessment was dealt with by Rule 7. Thereafter, Central Excise Rules, 2002 came into force on 1-3-2002 superceding the Central Excise (No. 2) Rules, 2001 and even in Rules of 2002, topic of provisional assessment was dealt with by Rule 7 which operated from 1-3-2002. The provisions of erstwhile Rule 9B were substantially different from Rule 7 of the new Rules on the topic of provisional assessment of duty. As per Rule 9B, in the contingencies contemplated by clauses a, b and c of sub-rule (1) thereof, the proper officer was requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng until the assessments are finalized. The provision for refunding amount when the provisional assessment is finalized, is contained under sub-rule (5) of Rule 9B of the erstwhile Rules and sub-rule (5) of Rule 7 of Rules, 2002 read with sub-rule (3) thereof. Under Rule 9B(5), it was provided that when the duty leviable on the goods was assessed finally, the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally assessed fails short of, or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. Under sub-rule (5) of Rule 7 of Rules, 2002, it is provided that where the assessee is entitled to a refund consequent to order for final assessment under sub-rule (3), there shall be paid an interest on such refund made as per final assessment. However, additional provision is made in sub-rule (6) of Rule 7 that such amount of refund shall be credited to the fund unless it is relatable to the duty of excise paid by the manufacturer if he had not passed on the incidence of such duty to any other person, in which case it will be paid to such applicant. Thus, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant date of payment of duty. In Excise Appeal No. 5176/04 of Indian LPG Cylinders, the claim of refund which is the subject matter of that appeal was made by the application dated 27-8-2002 in respect of the period from 1-7-1999 to 31-10-2000. Therefore, the entire claim was made beyond the prescribed period of six months which was applicable prior to 12-5-2000 and also beyond the period of one year which applied after 12-5-2000. Therefore, the entire refund claim of Rs. 6,69,066/- made by the appellant Indian LPG Cylinders was clearly time barred and the impugned order made against this appellant rejecting the refund claim is, therefore, fully justified and requires to be upheld. 12. As regards Excise Appeal No. 5178/04 of the appellant Tirupati LPG Industries Limited, it appears from the record that a portion of the refund claim to the extent of Rs. 32,574.45 was time barred because the invoices relevant to the said amount were issued on 31-1-2001, as detailed in the impugned order. According to the Adjudicating Authority, the claim for refund was made on 21-2-2002 i.e., after a lapse of one year from the date of these six invoices dated 31-1-2001. Therefore, to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the prices at which the excisable goods were supplied under these contracts to the oil companies, were provisional and they came to revise later giving rise to the refund claim. According to this appellant, (Tirupati LPG Industries Limited) whose claim was made within the period of limitation, the oil companies had issued debit notes for making deduction in the future bills. It appears from the record that both the authorities below have not properly taken into consideration the material which had a bearing on the question whether duty which was recovered on the basis of the provisional price was actually, to the extent of excess amount, deducted by the oil companies from future bills. This ought to have been examined because, there is a communication of the oil companies on the record that such excess amounts were to be adjusted. It would, therefore, be necessary for the Adjudicating Authority to consider the matter afresh in these two appeals of Tirupati LPG Industries Limited (Excise Appeal Nos. 5177 and 5178/2004) in respect of the claim for refund which relates to the period which is within the period of limitation prescribed under Section 11B. In appeal No. E/5177/04, sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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