Judgment:
1. These are four appeals filed by M/s. Bipico Industries (Tools) Pvt.
Ltd. being aggrieved with the common order-in-appeal dated 27-3-1987, passed by Collector of Central Excise (Appeals), Bombay. The matter relates to the admissibility of the turnover discount. The turnover discount announced by the appellants was related to the minimum purchases per quarter of the products Hacksaw Blades and Tool Bits etc.
The discount was not reflected in the price lists and the appellants paid Central Excise duty without taking this discount into account. At the end of the quarter they filed refund claims which were rejected by the jurisdictional Assistant Collector. On appeal, the Collector of Central Excise (Appeals) observed that the appellants had not claimed the turnover discount in their price list and they did not get it approved from the proper officer. He further observed that the allowance of this discount was not known to the Central Excise Department before or after the time of removal because the appellants had not declared such discount in the price list. It was also observed by the Collector of Central Excise (Appeals) that some of the refund claims were barred by limitation.
2. The matter was posted for hearing on 22-8-1996. The appellants had requested for adjournment on the ground of ill health of their consultant. This is an old appeal in which the refund claims related to the year 1984. As it appeared that the issue relating to turnover discount is covered by the authoritative pronouncements of the Apex Court we reject the request for adjournment and proceed to deal with the matter on hearing Shri M. Haja Mohideen, ld. DR.3. Shri Mohideen, ld. DR stated that at no stage the appellants declared the details of the scheme of turnover discount to the department. They filed price list but in those price list there was no mention of such a discount scheme. The department was not aware and the assessee also paid Central Excise duty without taking into account any discount. Subsequently they filed refund claims which were duly examined and rejected. He also mentioned that some of the refund claims were also barred by limitation.
4. We have carefully considered the submissions. The Supreme Court in their clarificatory order in the case of Union of India v. Bombay Tyres International (P) Ltd. reported in 1984 (17) E.L.T. 329 (S.C.) had recorded as under :- "Trade Discounts - Discounts allowed in the Trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods. Such Trade Discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price." 5. It is seen from the price lists on record (refer pages 44-46 of the paper book) that the assessee had lodged their claim with regard to turnover discount in the price list itself. In the Remarks column they have submitted as under :- "We are filing the price under protest and claiming only 1.5% discount as approved by the Assistant Collector, Central Excise, Surat and reserve our right to claim refund of excise duty paid on 8.5% of permissible deduction not allowed." "We are submitting our Trade Discount and Turnover discount Scheme for LAS Hacksaw Blade, HSS Hackwas Blade, for Tool Bits for III Quarter (1-7-1984 to 30-9-1984) and IV quarter (1-10-1984 to 31-12-1984)." "The circulars announcing the turnover discount scheme, authorised are on record." 6. The Collector of Central Excise (Appeals) had rejected the claim on the ground that the scheme was not known to the Central Excise department. We find from the price lists on record that the appellants have specifically mentioned the scheme in the Remarks column of the price list.
7. As the price lists have been filed under protest, the question of limitation will also not arise. The ld. JDR has referred that the assessee had not followed the procedure of payment of Central Excise duty under protest as prescribed under Rule 233B of the Central Excise Rules, 1944 which was in statute book from 11-5-1981. In the proceedings before the Assistant Collector of Central Excise, Surat a specific plea had been taken by the appellants that all their price lists were under protest. They have submitted that their claim could not be hit by the element of time bar irrespective of the fact as to whether on which particular date the same was sent to the Assistant Collector of Central Excise. The Assistant Collector had rejected this contention of the assessee by observing as under :- "Their second argument that the price lists are under protest and as such the claim will not be hit by time bar is also not acceptable as the time bar is statutory thing as laid down in the Central Excise Rules, and it cannot be altered as per convenience in any particular case, to a particular manufacturer." He has not disputed the fact that the price lists were filed under protest.
8. From the facts on record it is clear that the turnover discount was known and understood at the time of removal of the goods but it was quantified later. Keeping in view the clarificatory order of the Supreme Court in the Bombay Tyre International case referred to above, on merits the claim is allowable.
9. Coming to the aspect of limitation we find that although the assessee had remarked in the price list that they were claiming the lesser amount of discount under protest, the procedure prescribed in Rule 233B of the Rules had not been followed. They have also mentioned in the statement of facts that their claim of Rs. 18,256.23 for the period October, 1983 to December, 1983 was time barred. Similarly the claim for Rs. 22,350.46 for the period January, 1984 to March, 1984 was time barred and they had no grievance against their rejection. In respect of the claim for Rs. 19,580.00 for the period April, 1984 to June, 1984 they have admitted that the claim was time barred only upto 17-4-1984. In view of their own admission while on merits the order of the Collector (Appeals) is not sustainable, the amount of refund payable had necessarily to be restricted to the period of limitation.
In the case of Shri Ram Fibres Ltd. v. CCE reported in 1989 (42) E.L.T.714 (Tribunal), the Tribunal had held : "Procedure as given in Rule 233B of the Central Excise Rules, 1944 for payment of duty under protest if not followed then the duty paid will not be treatable as paid under protest." 10. In view of the above, the assessees are entitled for refund in respect of turnover discount in cases where the refund claims were covered by the normal period of limitation of six months. The refund claim, of course, will be further subject to the provisions of unjust enrichment.
11. The order of the Collector of Central Excise (Appeals), Bombay is modified and all the four appeals are disposed of in the above terms.