Commissioner of C. Ex. vs Vishnulakshmi Mills (P) Ltd.

K.B.K. Vasuki, J.—The Revenue is on appeal as against the order of the Customs, Excise and Service Tax Appellate Tribunal passed in Final Order No. 968/2004, dated 26-10-2004 [ 2005 (180) ELT 47 ], raising the following substantial question of law:-

Whether the Tribunal is correct in holding that the lower sale price for goods cleared at Depot on subsequent day will constitute the basis for assessment?

The respondent mills herein referred to as the assessee are manufacturers of Cotton Yarn, CBY and NCSY. They have cleared goods from the factory premises to various depots during the month of February, 1997. While doing so, they declared the price of the goods at the rate which was higher than the price at which same goods sold through the depot. Later on, the assessee came forward with the claim for refund of the excess duty remitted by them on the goods on the basis that the price declared by them for their factory gate clearance was higher than the price, at which similar goods were sold through the depot.

The Assessing Officer declined to order refund on the ground that the assessee ought to have ascertained the depot price on the date of clearance from the factory premises and declared the same as final price and as the assessee has chosen to declare the different price and later claimed a refund on the ground the depot transactions on that day took place at a lower price, the assessee is disentitled to claim any refund and hence rejected the claim. Aggrieved by the same, the assessee preferred separate appeals before the First Appellate Authority. The First Appellate Authority also having gone into in detail all the relevant facts and materials upheld the order of the lower authority. As against which, the assessee preferred appeal before the C.E.S.T.A.T..

The C.E.S.T.A.T. has arrived at a conclusion that the assessee cleared the subject goods from factory, on a price, which are higher than the price prevailing on the same day at depot and hence entitled to the benefit of lower price and allowed the refund as sought for by the assessee.

The C.E.S.T.A.T. has found so by relying upon the similar order passed in the refund claim by the earlier Bench of the Tribunal in 2003 (89) ECC 274 , dated 10-11-2003. The Tribunal was of the view that the facts of the case involved in the case above cited are identical with that of the instant case and hence, applying the same decision allowed the refund claim made by the assessee for the present case and allowed the appeal, however, subject to condition that claimant establish before the original authority that the claim is not hit by the bar of unjust enrichment. Hence, this appeal by the Revenue before this Court.

The short point arises for consideration is that whether the assessee is entitled to refund of excess duty remitted by them on the basis of the prevailing price on the same day or the subsequent day or on the later date.

The facts narrated by the Assessing Officer would undisputedly disclose that the basis for the refund claim made by the assessee was the prevailing price in the depots on dates latter to the dates on which goods were cleared from the factory.

It is not the case of the assessee that the prevailing price on the depot, which is the basis for the benefit claimed herein is the price for the date of the clearance of goods from their factory premises. It is equally not the case of the assessee that no price is available at the depot on the date on which the goods are cleared from the factory. In such cases, it is the duty of the assessee to ascertain the price prevailing on the factory as well as in the depot and to quote prevailing lower price beneficial to the assessee and as the choice is given to the assessee, the price quoted by the assessee shall be the final price and shall be the price for assessment. The case relied on by the Tribunal in the present case in the impugned order is one such case, wherein, the price adopted by the assessee therein was the price prevailing in the depot on the same day in which, the goods are cleared from the factory. However, the Tribunal had erroneously proceeded on the basis that the price based on which, benefit claimed is the prevailing price at the depot on the date of which goods are cleared from the factory. In fact, the price quoted by the assessee is the price at the related date than the date on which the goods are cleared. As such, the decision of the C.E.S.T.A.T. in the case of 2000 (122) ELT 171 , which is referred to in Paragraph 14 by the lower appellate authority, apply to the facts of the present case. It is to be noted that the lower appellate authority citing the above said decision rejected the claim of the assessee, which is clearly applicable to the facts of the present case.

Going by the factual situation, we are of the considered view that the C.E.S.T.A.T. had grossly erred in adopting the rates, which are contrary to the actual rates and totally contrary to the facts involved in the present case, as such, we do not find any justification to sustain the same and hence, the same calls for interference. In the result, the order of the C.E.S.T.A.T. is set aside and the order of assessment stands confirmed. Accordingly, Civil Miscellaneous Appeal is allowed. No costs.