RAJASTHAN DRUGS AND Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) IN these two appeals, the appellants are challenging the order of the Commissioner (Appeals). The appellants had reduced the prices of the P&P medicines supplied to the Government of Rajasthan retrospectively. Consequent to this action, they filed refund claim for the duty paid in excess at the time of clearance on higher price. Their refund claim was rejected by lower authorities as they failed to establish that duty was passed to the buyer. Shri G.B. Muchhala, learned Consultant relied on the decision of the Tribunal in case of ONGC v. CCE, [2003 (158) E.L.T. 829] in their support and pleaded that their appeal may be allowed.

(2.) SHRI P.M. Rao, ld. JDR appearing for the Revenue stated that the appellants changed their prices retrospectively without any clause in the Price Contract for such change in the prices. They had changed the prices retrospectively, then they should have first challenged the assessment order. This was not done by them. He relied on the Supreme Court's decision in the case of CCE v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285] and Priya Blue Industries Ltd. v. CC (Preventive) [2004 (172) E.L.T. 145 (S.C.)] in which it was held that refund claim contrary to assessment order not maintainable without order of assessment having been modified in appeal. He also pleaded that the Tribunal in case of Jindal Strips Ltd. v. CCE, Rohtak [2004 (97) ECC 782 (Tribunal)] has followed these decisions and held that where a duty has been collected under a particular order, refund of that duty could not be claimed unless the order (whether assessment adjudication, or any other order) was set aside according to law. Shri P.M. Rao, ld. JDR also referred to the decision of the Supreme Court in case of MRF Ltd. v. CCE, Madras [1997 (92) E.L.T. 309] wherein it was held that reduction in prices subsequent to clearance of goods on payment of duty for whatever reasons, not to effect the liability of payment of duty. Refund claim for differential duty due to reversal of price not acceptable unless there is an agreement with the Government that it will refund the excise duty to the extent of reduced prices. In the present case, there was no such agreement nor there was any clause for prices variation in their agreement. Therefore, the lower authorities have correctly denied the refund to the appellants.

(3.) ON considering the submissions made by both the sides, I find that there was no price variation clause in the agreement, with the appellants and the Rajasthan Government for supply of medicines and at the time of the clearance of the goods, they paid duty as applicable. However, subsequently, they reduced the prices retrospectively of their own and started recovering the excess duty paid and filed refund claim without modifying the price declaration and without challenging assessment. I find that the Commissioner (Appeals) has relied on the decision of the Supreme Court in case of MRF Ltd. v. CCE, Madras [1997 (92) E.L.T. 309] holding that once the assessee has cleared the goods on the classification and price indicated by him at the time of removal of the goods from factory gate, the assessee become liable to payment of duty on that date and time, and subsequent reduction in prices for whatever reasons, cannot be a matter of concern of Central Excise Department insofar as the liability to payment of excise duty was concerned. By following this decision, Commissioner (Appeals) held that the adjudicating authority correctly disallowed the refund claim. I also find that decision of Tribunal in case of ONGC v. CCE (supra) is not applicable in the present case as in that case duty was paid by mistake over and above the approved prices whereas in the present case the downward revision of price is retrospective without any clause for such change in the price contract.