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Refund of excess Excise duty permissible on reduction in contract price after clearance of goods from factory

Central Excise - By: - Bimal jain - Dated:- 27-5-2015 - Dear Professional Colleague, We are sharing with you an important judgment of the Hon ble Supreme Court, in the case of HPL Socomac Ltd. Vs. Commissioner of Central Excise, Gurgaon [2015 (5) TMI 492 - SUPREME COURT] on the following issue: Issue: Whether the Assessee is eligible for the refund of excess Excise duty paid on the basis of original price in the purchase order which was reduced after clearance of the goods from the factory? Fact .....

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rges subject to the condition that all the supplies to be made upto March 31, 2002. However upto March 31, 2002, the Appellant had supplied only 30,000 electronic meters, the remaining quantity of 35,000 meters were supplied to DHBVNL between May 8, 2002 and May 28, 2002. Prior to the supply of the remaining quantity of meters vide letter dated April 11, 2002 DHBVNL informed to the Appellant that the price of the remaining quantity would be lower of the following two: The new rate of contract a .....

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he original price in terms of the original purchase order, however actual reduced price is ₹ 600 /- per meter, refund claim under Section 11B of the Central Excise Act, 1944 ( the Excise Act ) was filed in respect of the difference between these two prices calculated for 35000 meters. However, the Deputy Commissioner vide his order dated December 9, 2003 rejected the refund claim of the Appellant which was later on upheld by the Ld. Commissioner (Appeals) holding that as per Section 4 of t .....

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d, the Appellant filed an appeal before the Hon ble Apex Court. Held: The Hon ble Apex Court held that it is clear that by letter dated April 15, 2002, the original purchase order dated October 31, 2001 was novated insofar as price was concerned, which is before the date of removal of goods from the factory premises in May, 2002. Since duty has been paid on the basis of the original price in the purchase order, the difference between the said rate and the reduced rate has to be refunded. It was .....

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