At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONORABLE JUSTICE: SULEKHA BEEVI C.S.
By, MEMBER AND THE HONORABLE JUSTICE: V. PADMANABHAN
For Petitioner: M. Karthikeyan, Advocate And For Respondents: K.P. Muralidharan, AC (AR)
1. The appeal is filed against Order-in-Appeal No. 70/2005 (M-I), dated 25-7-2005. M/s. Greaves Cotton Limited, Chennai - 19 (hereinafter referred to as the "appellants") are engaged in the manufacture of various machinery falling under Chapter 84 of Central Excise Tariff Act, 1985.
1.1 The appellants opted for provisional assessment from 1993 and the provisional assessments were also finalised upto 1998-99. The appellants closed their Unit from 1999 to 2001 and again started production from September, 2001 onwards.
1.2 The appellants sell their product from their depot. They paid the differential duty whenever the goods were sold at a higher price from their depots than the price at which the goods were cleared from the factory and filed refund claim when the goods were sold from the depot at a lower price than the price at which the goods were cleared from the factory. A refund claim for Rs. 79,539/- was filed by the appellants on 19-8-2004 for the period from April, 2003 to March, 2004. For the same period the appellants have paid differential duty of Rs. 1,29,321/-.
1.3 A show cause notice C. No. IV/10/23/2004-RF, dated 10-9-2004 was issued to reject the refund claim in terms of Section 11B of Central Excise Act, 1944 read with Rule 7 of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000.
1.4 After due process of adjudication, the lower adjudicating authority vide an Order-in-Original No. 8/2005, dated 25-1-2005 rejected the refund claim.
2. When the issue was challenged before Commissioner (Appeals), they did not get any relief. Consequently, the present appeal has been filed.
3. With the above background, we have heard Shri M. Karthikeyan, Advocate on behalf of the appellants and Shri K.P. Muralidharan, AC (AR) on behalf of Revenue.
4. The main grounds of appeal are :-
(i) The appellants sell their product from their depot. The assessments were provisional and were finalised upto 1999. The factory was shut from 1999-2001 and when production was resumed, the appellants were under the impression that the provisional assessment was continuing as bonds were not cancelled; and
(ii) The appellants were made to pay differential duty whenever goods from depot were sold at a higher price. Hence, the appellants were also entitled to refund when the goods were sold for a lesser price from the depot.
5. Heard both sides and perused the records.
6. The valuation of the goods under Central Excise law is covered by Section 4. The section was amended w.e.f. 1-7-2000. The connected Central Excise Valuation Rules also were amended from this date. Rule 7 of the Central Excise Valuation Rules is applicable for the depot sales. As per the provisions of this rule, goods at the time of clearance from factory are required to be charged to Central Excise duty at such rates prevailing contemporaneously at the depot. Subsequently, if such goods are sold at higher or lower prices from the depot, there is no liability to pay differential duty or refund as the case may be.
We examined the facts of the case in the light of the amended law for depot clearances. We find that the appellants are not required to pay differential duty in cases where goods have been sold at higher prices from the depot. Like-wise, in cases where goods are sold at lower prices from the
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depot, the appellants will not be eligible for any refund. The Commissioner (Appeals) in the impugned order has also given detailed findings to the effect as above. He has also recorded there was no provisional assessment during the relevant period. As such, we have no reason to interfere with the impugned order, which is upheld. Consequently, appeal is dismissed.