Order Date: 4 July 2022

Facts:

• The appellant, M/s Neel Metals Products Ltd., is a manufacturer of automotive parts and supply their finished goods inter alia to Hero Motor Corp Ltd. The appellant was supplying automotive parts to M/s Hero Motor Corp under purchase order. Subsequently, Hero Motor Corp amended the said purchase order being amended, with retrospective effect, modifying the prices downwards. Debit was issued by Hero Motor Corp showing details of invoices which was revised due to the aforementioned revision of prices.
• The appellant filed a refund claim for the refund of excess excise duty before the Assistant Commissioner, mentioning the reason for refund claim and also enclosed various documents which contains the details of invoices which were revised due to the downward price revision, copy of sales invoices issued by appellant which were relevant.
• The revenue contended that in view of the ruling of Hon'ble Supreme Court in the case of MRF, the refund is not allowable, wherein the Apex Court had observed – when an assessee claims refund of duty on the basis of price variation, under the price variation clause of the relevant contract subsequent to clearance of the goods, the claim, for whatever reason, cannot be allowed. Such fluctuation in price subsequent to clearance of the goods cannot affect the manufacturer’s liability to pay excise duty.
• Revenue further contended that appellant had passed on the incidence of duty to their customer-Hero Moto Corp. at the time of clearance of the goods. Accordingly, SCN was issued with a proposal to reject the refund. 
• Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) who vide impugned Order-in-Appeal was pleased to reject the appeal, upholding the Order-in-Original. 
• Being aggrieved the appellant is before this Tribunal.

Issue:

• Whether the refund claim filed by the appellant for excess duty paid due to price revision with retrospective effect, whether the same have been rightly rejected on the ground of unjust enrichment?

Order:

• The Tribunal observed that there is no real dispute with respect to the facts and circumstances. Also there is no good reason to doubt the transaction between the appellant and their buyer Hero Motor Corp Ltd. It is further noticed that Hero Motor Corp Ltd, Haridwar Unit, to which the goods have been supplied is operating under ‘Area Based exemption’ during the relevant period. Thus, there is no chance of Hero Motor Corp having taken Cenvat credit and utilised the same.
• There is no doubt as to the genuineness of the transaction as well as the debit note in question issued by Hero Motor Corp Ltd, and accepted by the appellant-assessee. Further, the amount of refund claim have been shown as duty recoverable from the revenue in the Books of Accounts and the financial statements of the appellant being balance-sheet.
• Hence, the impugned orders are set aside. The appeals are allowed with consequential relief.