1. Respondent is absent in spite of notice of hearing, but has sent a request for disposal of the appeal on merits. We have heard Shri M.Ali, JDR.2. This appeal arises out of a refund claim submitted by the respondent herein for Rs. 5,720.10. It relates to the period from 23-8-1985 to 18-12-1985. The claim was presented by the respondent before the Sector Officer on 12-5-1986 who, instead of returning it to the assessee, forwarded it to the Assistant Collector, the jurisdictional officer who received it on 2-12-1986. It was alleged by the respondent that supplies were being made earlier 6f the excisable goods to the buyer on the basis of a contract, the contract terminated on 22-2-1985, but supplies were continuing to be made on the understanding that fresh purchase order on fresh terms will be issued, that subsequently purchase order was issued on 30-9-1985 under which the price was slightly less than the price shown in the earlier contract, but, meanwhile, bills had been prepared for these supplies at the old contract rate and, therefore, for the purpose of returning the excess paid credit notes were issued. Accordingly, it was contended that during the period in question, the appellant had paid duty on higher price, though lower price had been fixed in the purchase order dated 30-9-1985. Assistant Collector rejected the refund claim on the ground of limitation and also on merits taking the view that the subsequent reduction of price cannot result in reduction of duty. He had also rejected another refund claim filed by the same assessee for Rs. 5,753.32. The assessee filed two appeals before the Collector (Appeals) who disposed of the same by a common order agreeing that the assessee would be entitled to refund, but holding that the refund claim of Rs. 5,720.10 was partly barred by limitation. He directed the Assistant Collector to refund the amount not barred. He also disposed of the appeal against the order rejecting the other refund claim. The order passed by the Collector (Appeals) in relation to the refund claim of Rs. 5,720.10 is challenged by the Department in this appeal. It is not known if the Department has filed another appeal in relation to the refund claim.
3. This is not a case, as contended by the Department, of subsequent reduction in price of goods supplied earlier at higher price. This is a case where goods were supplied after the expiry of an earlier contract and before issue of a subsequent purchase order and bills were prepared tentatively at the price covered by the earlier contract, subject, of course, to price being agreed between the parties subsequently.
Therefore, during the period in question, the parties had not agreed on price. The price was agreed subsequently. Duty would be payable only on the price agreed between the parties. In a similar case disposed of in Appeal No. E/2352/90-A on 29-8-1997, we held that the price shown in the bills subject to finalisation must be deemed to be provisional and cannot deprive the assessee of the right to refund of excess paid.
4. If we go by the date on which the Assistant Collector received the refund claim, namely, 2-12-1986, the entire refund claim would be barred by time in view of the provisions in Section 11B of the Central Excise Act, 1944. There is no dispute that the refund claim was presented before the Sector Officer on 12-5-1986. Shri M. Ali, JDR states that trade notice indicated that the Assistant Collector would be the only competent officer to receive and dispose of the refund claims. Even if that be so, the proper thing for the Sector Officer was to return the refund claim immediately so that it could be presented before the competent authority without delay. Instead of doing so, the Sector Officer transmitted the refund claim to his superior officer namely, the Assistant Collector who acted on it. In these circumstances, it must be deemed that it was received on 12-5-1986.
That being so, only a part of the refund claim would be barred, as rightly held by the Collector (Appeals).