CCE, MEERUT-II Vs. J.C.L. INTERNATIONAL

JUDGEMENT

(1.) IN this appeal, preferred by the Revenue, the issues involved are whether the refund of Central Excise duty claimed by M/s. J.C.L. International is hit by time limit and whether the principle of unjust enrichment is also applicable. Shri Ashok Kumar, learned D.R., mentioned that the Respondents, manufacturer of L.P.G. Cylinders, have filed refund claims on the ground that initially M/s. I.O.C. agreed to price of Rs. 618.15 plus Basic Excise duty and other charges subjected to revision of price; that the price was later on reduced to Rs. 605.19 plus duty and other charges; that the Deputy Commissioner under Adjudication Order No. 24/99 dated 31.8.1999 rejected part of the refund claim being filed beyond the time limit since the claim was made on 15.3.1995 for the cylinders cleared during the period from 22.4.1994 to 12.9.1994 holding that there was no order made for provisional assessment under Rule 9 -B of the Central Excise Rules; that the Adjudicating Authority also held that the Respondents failed to prove that the duty burden was not passed on to the buyer; that, however, on appeal, the Commissioner (Appeals), under the impugned Order, allowed the appeal filed by the Respondents holding that the assessment was provisional as the Assistant Commissioner had himself written to the Superintendent that the prices" should be approved provisionally and the Superintendent had also assessed the R.T. 12 provisionally and that principle of unjust enrichment is not applicable in view of the letter dated 6.5.1999 of I.O.C. to the effect that excess duty paid by them was being recovered from the manufacturer.

(2.) ON the other hand, Shri P.S. Bedi, learned consultant, submitted that the purchase order placed by their customers contain terms and condition regarding rate per cylinder including terms regarding escalation and de -escalation; that, therefore, the cylinder prices mentioned in the purchase order are provisional; that it is because of this reason the Assistant Collector under letter dated nil -7 -1993 directed the Range Superintendent to approve the price list provisionally on account of escalation clause; that the monthly returns for the relevant period were also assessed provisionally on account of escalation/de -escalation clause; that this is evident also from the endorsement on the R.T. 12 Return itself. The learned consultant, therefore, contended that once the assessments are provisional, the question of applying the time limit specified in Section 11 -B of the Act does not arise; The learned Advocate also mentioned that it has been held by the Tribunal in Indian Aluminium Cables Ltd. v. CCE, 1997 (71) ECR 565 that where goods are supplied to the Government Department against contracts containing price variation clause, refund claims are not barred by limitation since approval of price list and assessments were provisional. He finally submitted that the principle of unjust enrichment does not apply in the present matter as they have not passed on the incidence of duty to their customer; that M/s. I.O.C. under their letter 6.5.1999 have mentioned that wherever there is a de -escalation in the price of LPG cylinders in the purchase order, excess excise duty paid at the time of clearance on the pre -de -escalation value is always being recovered from the manufacturer as the excise duty is payable on the final value; that this is also supported by payment advices issued by M/s. I.O.C. at the time of releasing payment of running bills; that in Payment Advice deductions had been made on account of rate difference. Excise difference, sales tax difference; that they had also filed a detailed certificate of the Charted Accountant in this regard; that the Tribunal, in the case of CCE v. Shivalik Electric Equipment Co. Ltd. Final Order No. 17 & 18/2002 A dated 8.1.2002, has held that "when the price is agreed upon between the parties it will be open to the parties to the agreement to modify the rate."

(3.) THE Tribunal further held that "The statement of law made in Indian Aluminium Cables Ltd. (supra) by the bench of the Tribunal that provisions of Section 11B are for claiming refund of the duty amount where the Contract/Purchase order contains a variation/escalation clause, would not be attracted, cannot be said to be correct one............This statement of law laid down by the Bench in that case is legally erroneous and cannot be endorsed. In such a situation also, the provisions of Section 11B of the Act, are attracted and application for claiming refund of the excess duty has to be filed by the assessee within a period of six months from the relevant date." Admittedly in the present matter refund claim was filed on 15.3.1995 in respect of duty paid during the period from 22.4.1994 to 12.9.1994 which is beyond the period of six months specified in Section 11B of the Central Excise Act at the relevant time and thus refund claim is barred by limitation to the said extent. As far as remaining amount of duty, the refund of which has been claimed by the Respondent, is concerned, the refund is available to the Respondents as the principle of unjust enrichment is not attracted. It is not disputed by the Revenue that the Purchase Order contained escalation/de -escalation clause. Further it is apparent from the payment Advices, brought on record by the Respondents, that deductions on account of excise duty difference was made. In these circumstances it cannot be claimed by the Revenue that the incidence of duty was passed by the Respondents to their customers. Accordingly the principle of unjust enrichment is not applicable to the refund and the amount of duty paid in excess is refundable to the respondents.