TMI Blog2010 (7) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... . the Commissioner (Appeals), Noida. By the impugned order, the Commissioner (Appeals) has set aside the order passed by the Deputy Commissioner of Noida dated 14th of June, 2004. As a result of the impugned order, an application for refund of the amount of Rs. 22,95,510/-, which was dismissed by the Deputy Commissioner, stands allowed in favour of the respondents. The respondents had supplied electric energy electricity meters to M/s. 3. U.P. Power Corporation Ltd. in the year 2002. On account of delay in delivery of the goods and consequential default in compliance with the performance of the terms of the contract between the parties, certain amount of percentage of the price was deducted by M/s. U.P. Power Corporation Ltd. while paying the dues payable to the respondent in relation to the said meters supplied by them to the said corporation. Pursuant thereto the respondents filed refund claim application dated 3-9-2003 claiming refund, of Rs. 22,95,510/-. The said claim was rejected by the adjudicating authority, but was allowed in the appeal before the Commissioner (Appeals). Hence, the present appeal. Learned DR while placing reliance on the decision in the matters of 4. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew taken by the Commissioner (Appeals) in the matter in hand, it would be necessary to peruse the terms of the agreement between the parties. However, since the appellants have not placed on record the copy of such agreement, he requested one day s time to place on record copy of such agreement. Since the point, which is sought to be canvassed on behalf of the 7. respondents goes to the root of the matter, we are inclined to grant time to the respondents till tomorrow to produce the copy of the agreement. Adjourned till tomorrow, the 8th of July, 2010. Resumed on 8th July, 2010. Having heard for some time the learned Advocate for the respondents as the 8. Tribunal s hearing time being over, further hearing is adjourned to 15th July, 2010. Resumed on 15th July, 2010. The learned DR drawing attention to the memo of appeal submitted that the 9. impugned order is sought to be challenged on three grounds. Firstly, the refund has been allowed wholly on the ground that the burden of duty claimed as refund had not been passed over to the buyers by the respondents while ignoring other relevant aspects of the matter. Secondly, the Commissioner (Appeals) failed to take note of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and could not choose to have different approach in different cases on the similar issue. He further submitted that the price variation is clearly borne out from the contract between the parties and, therefore, while ascertaining the transaction value the same should be given due regard. As far as factual aspects of the case are concerned, no controversy 11. between the parties is disclosed from the records in respect of certain matters. It is not in dispute that the price for the goods to be supplied by the respondents to M/s. U.P. Power Corporation Ltd. was fixed under the contract and the same remained static and firm, even in case of late delivery. This fact cannot be disputed is also apparent from the terms of the contract. Only aspect which is sought to be vehemently argued on behalf of the respondents is relating to effect of the right of the consignee of the product supplied by the respondents for the deduction which can be made by the said consignee from the price payable to the respondents for such late supply of goods in view of Clause 27 of the purchase order, which reads thus : If the contractor shall fail in the due performance of his contract within the time f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it would be the right of the consignee to have reduction from the contractual value of the goods on account of such late delivery. Clause 27 which deals with the situation arising out of late delivery of goods nowhere speaks of price variation, but it essentially relates to the right of the consignee to pay lesser amount than the contractual price of the goods on account of late delivery of goods by the respondents, while contractual price remaining static and firm. As far as the price variation clause under 2.18 is concerned it relates 14. to the price in general as prevalent in the market. It specifically uses the phrase the relevant indices of applicable price variation formula . Undoubtedly, the third sub-para of the clause also relates to the situation arising on account of late delivery subsequent to the price variation. It does not relate to price variation on account of late delivery. But it relates to the right of the consignee for reduction even from the price varied, in case of late delivery. In other words, in case of late delivery the Clause 2.18 provides for the right of the consignee not only to pay the price as per the price variation but also to exercise the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduction from the price agreed and fixed for the goods by the parties, on account of breach of contract by the supplier in relation to the duty of delivery of the goods. It has nothing to do with any variation of the price. Price remains static. Only the obligation of the consignee in discharging the liability to pay the price agreed upon was sought to be reduced on account of breach of condition relating to the date of delivery of the goods. In Bhartia Cutler Hammer Ltd. case the Tribunal referring to a 17. similar situation and after taking note of Section 73 of the Indian Contract Act as well as one of the terms of the agreement between the parties which provided that in case of delay in supply of the goods on the part of the consignor, liquidated damages at the stipulated rate shall be payable by the consignor and shall be deducted from the consignor invoices, held that : The question of payment of damages arises when there is a breach of the contractual clause regarding time for performance. The parties stipulated time for performance, and provided for breach of contract, and payment of liquidated damages. The mode of payment has also been stipulated by providing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na Bijli Vitran Nigam Ltd. for supply of 65,000 meters upto 31st March, 2002. The delivery was to be completed in a phased manner. The assessee could deliver 31,000 meters only within the contractual period. The letter dated 11th April, 2002 of the Nigam disclosed that a penalty upto 5% of the value was imposed on the assessee for delayed delivery. After completion of delivery of the entire consignment, the assessee filed refund claim claiming assessment of the delayed quantity at a reduced price by 5%. The claim was rejected. The order of the lower authority was confirmed by the Tribunal while holding that : It is noted that the original assessment, and payment of duty took place at the contracted price. The change in the amount paid is on account of imposition of penalty for delayed period. The penalty is separate from the price of the goods. There is no provision in the excise law for allowing deduction of penalty from the sale price for the purpose of assessable value. The learned advocate for the respondents is justified in submitting that, 21. it was a case of penalty, therefore, it would be of no help in deciding the matter in issue. However, at the same time it is to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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