HPL SOCOMAC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M/s. HPL Socomac Private Limited, Gurgaon, are engaged in the manufacture of electronic meters falling under Chapter heading 9028.00 of the First Schedule to the Central Excise Tariff Act, 1985. By an order dated 9.12.2003 passed by the Deputy Commissioner, their refund claim amounting to Rs. 21,24,920/- has been rejected Under Section 11-B of the Central Excise Act. The Appellant received a purchase order dated 31.10.2001 from M/s. Dakshin Haryana Bijli Vitran Nigam Limited, Hissar (in short "DHBVNL") for supply of 65,000 single phase (5-20 Amp.) electronic meters @ Rs. 1,120/- per meter on FOR basis. The price was inclusive of taxes, freight and insurance charges. Under condition No. 6 of the purchase order, the full quantity of 65,000 electronic meters was required to be supplied upto 31.3.2002. The Appellant supplied 30,000 electronic meters upto 31.3.2002 @ Rs. 1,120/- per meter. The balance quantity of 35,000 meters was supplied between 8.5.2002 and 28.5.2002.

(2.) Prior to the supply of the said meters, M/s. DHBVNL sent a letter dated 11.4.2002 asking the Appellant to agree to furnish an undertaking to accept the lowest rates to be finalized as per the new rate contract under tender Enquiry No. QD 121 or by levying a penalty of up to 5% on account of delay in delivery of the material as per the purchase order, whichever happens to be lower. This novation of the price contained in the purchase order was accepted by the Appellant vide a letter dated 15.4.2002, by which the Appellant gave the necessary undertaking.

(3.) By a letter dated 17.10.2002, M/s. DHBVNL informed the Appellant that the meter rate as per the new rate contract had been decided at Rs. 600/- FOR and, therefore, this being lower than 5% of Rs. 700/- per meter, which would have been the penal amount on account of delay, the said rate of Rs. 600/- per meter was fixed against delivery of the aforesaid meters.