ASHOK LEYLAND LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE are appeals filed by M/s. Ashok Leyland Limited against orders passed by the Commissioner of Central Excise (Appeals). The lower appellate authority upheld the orders passed by the original authority rejecting the refund claims of the assessee. The refund claims were fifty -one in number, which were in respect of goods imported and cleared under an equal number of Bills of Entry over a period of time. It appears from the records that the appellants had placed orders for imports between March and September 1995. Where there was previous import of like goods, the purchase order reflected the price at which such goods had been previously imported. Where there were no previous imports of like goods, the price was indicated in the purchase order as "PTBA" (price to be agreed). The subject imports took place between December 1995 and May, 1996. The goods were assessed on the basis of the invoice price and duty paid accordingly. Subsequent to clearance of the goods against such payment of duty, the appellants negotiated with their supplier and obtained reduction of price of such goods and the latter issued credit note to the former for the differential price (difference between the price indicated in the invoice and the reduced price). The refund claims in question, which were based on these credit notes, were filed for the differential duty on the differential value of the goods. These claims have been rejected. Hence these appeals.

(2.) HEARD both sides. Ld. Counsel submitted that the original authority and the first appellate authority had failed to appreciate the fact that the post -importation price reduction was in terms of a pre -existing contract. The purchase order placed on the foreign supplier by the appellants for each import contained a specific provision for price variation and the relevant credit note was issued in respect of the differential price consequential to the price reduction agreed to between the appellants and the supplier subsequent to clearance of the goods. Counsel argued that it was the reduced price which should be adopted as assessable value of the goods for the purpose of payment of customs duty. Though the invoices did not expressly indicate that the price slated therein was provisional, they were to be read with the terms of the contract between the appellants and the supplier to discern that the price charged in the invoice was not a final price. According to the ld. Counsel, the assessments on the Bills of Entry were to be treated as provisional and it was incumbent on the authorities to finalise them on the basis of the price ultimately settled between the appellants and the supplier, in which event refund would be admissible. Counsel relied on the Apex Court's decision in Karnataka Power Corporation Ltd. v. Commissioner [2002 (143) E.L.T. 482 (S.C.)]. The Counsel, further, argued that Section 149 of the Customs Act had been wrongly applied to the case by the lower authorities. Section 27 of the Customs Act governing refund claims was a self -contained provision independent of Section 149 of the Act. Refund claims were to be decided on in terms of Section 27, only, without reference to Section 149. Under Section 27, the appellants were entitled to refund of the excess duty paid. Counsel relied on the Tribunal's decisions in Sanghi Medical Centre v. CC [1997 (95) E.L.T. 609] and Hindalco Industries Ltd v. CC [1997 (96) E.L.T. 477].

(3.) LD . Joint CDR, assisted by ld. SDR, submitted that the assessments of the relevant Bills of Entry, made at the time of clearance of the imported goods, were not challenged by the appellants at any point of time and, consequently, the assessments became final and binding on them. The duty paid by the party on the basis of such assessments was not liable to be refunded. Reliance was placed on the following decisions of the Tribunal : -