Relief to Savita Oil Technologies, Refund Allowable on Excess Duty Paid Due to Extending Quantity Discount to Customers: CESTAT [Read Order]

 As a relief to Savita Oil Technologies Limited, the Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) refund is allowable on excess duty paid due to extending quantity discounts to customers.

 The issue was whether the appellant is liable to pay duty on the quantity discount claimed by them and whether the excess duty paid due to extending the quantity discount, the same is refundable even if the appellant has not opted for provisional assessment.

Shri Mehul Jivani, Chartered Accountant appeared on behalf of the appellant and submitted that there is no dispute that the excess payment was known in advance and accordingly as per the policy, quantity discount was extended to the customer from the depot. 

It was submitted that first the goods were cleared from factory to depot and from there it was sold by giving quantity discount.  There is the excess payment of duty for which the refund claim was made. 

The Commissioner (Appeals) has upheld the rejection of the refund accepting the view of the Adjudicating Authority that since the appellant has not opted for provisional assessment, a refund cannot be granted. 

As regards the objection of the Revenue that since the appellant has not followed the provisional assessment refund is not payable, we find that this issue is no longer res-integra as in the appellant’s case this Tribunal has taken a view that merely because the assessee has not followed the provisional assessment, admittedly the excess payment of duty must be refunded to the assessee. 

The two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) held that “the appellant is entitled to a refund of excess duty paid due to extending the quantity discount to the customers.  However, the factual aspect of correct quantification can be verified by the adjudicating authority, if required.  Accordingly, we set aside the impugned order and allow the appeal in the above terms. “

To Read the full text of the Order CLICK HERE

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