Refund of excise duty cannot be claimed for price reductions occurring after clearance unless the goods were cleared under a provisional assessment procedure as per Rule 7 of the Central Excise Rules, 2002.

JUSTICE DILIP GUPTA

All these ten appeals that have filed by Sika India Pvt Limitied¹the appellant seek the quashing of the orders passed by the Commissioner (Appeals) that uphold the order of the Adjudicating Authority denying refund claims of the appellant under section 11B of Central Excise Act, 1944²the Central Excise Act for the reason that the appellant had not resorted to the provisional assessment procedure contemplated under rule 7 of the Central Excise Rules, 2002³the Central Excise Rules

2. Shri S.C. Vaidyanathan, learned counsel for the appellant submitted that the issue stands concluded in favour of the appellant by the decisions of the adjudicating authority for the period prior to the period involved in these appeals and also for subsequent periods and these orders have attained finality. He, therefore, submits that the Commissioner (Appeals) committed an error in rejecting the refund claims of the appellant.

3. Shri Dindayal Mangal, learned authorized representative appearing for the department however, supported the impugned order and submitted that the issue now stands decided in favour of the department by a decision of a Division Bench of this Tribunal in M/s Super Auto (I) Ltd vs. Commissioner of Central Excise, Faridabad⁴Excise Appeal No. 3023 of 2009 decided on 12.09.2025

4. It transpires from the records that the appellant had cleared the finished goods to its depot assessing duty at a higher value erroneously due to system error during the period of dispute from September 2013 to December 2013, March 2014, April 2014 and June 2014 to September 2014. Refund claims were filed by the appellant on the ground that the goods sold by the appellant from its depot to dealers/buyers was at the price lower than the price on which the goods were cleared from the factory of the appellant to the depot.

5. Show cause notices were issued to the appellant to show cause as to why the refund claims should not be rejected and ultimately, the adjudicating authority rejected the refund claims for the reason that the appellant had not resorted to provisional assessment under rule 7 of the Central Excise Rules. The appeals filed by the appellant before the Commissioner (Appeals) were rejected.

6. It may be that in the case of the appellant for the previous period and for the subsequent period refunds were granted to the appellant and the orders have attained finality, but it is a fact that on a reference a division bench of the Tribunal in Super Auto held that in the absence of provisional assessment having been resorted to under rule 7 of Central Excise Rules, refund cannot be claimed.

7. The relevant paragraphs of the order of the division bench in Super Auto are reproduced below:

“6. We have considered the submissions made by both the parties and perused the material on record as well as the case-laws relied upon by both sides. We find that though there are contrary decisions of various benches of the Tribunal, but the jurisdictional High Court in the case of Mauria Udyog Ltd (supra) has considered the issue and has held, in para 6 & 7, as under:

"6. Learned Counsel for the revenue on the other hand points out that apart from the fact that the matter was directly covered against the assessee by a judgment of Hon’ble Supreme Court in MRF’s case (supra), there is a subsequent judgment of the Hon’ble Supreme Court in Metal Forgings v. Union of India , 2002 (146) E.L.T. 241 in which it was held :-

"12. From the above, it is clear that to establish that the clearance were made on a provisional basis, there should be first of all an order u