CESTAT Chennai Allows Refund of ₹47.15 Lakh to Woory Automotive, Holds Unaccepted Price Revision Cannot Inflate Excise Value

April 27, 2026 : The Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench has ruled that excise duty paid on the basis of a unilateral price revision through supplementary invoices is not sustainable when such revised price is never accepted by the buyer.

In a significant decision, the Tribunal allowed the appeal filed by M/s Woory Automotive India Pvt. Ltd. and directed refund of ₹47,15,913, setting aside the orders of the lower authorities which had rejected the refund claim.

The Bench comprising P. Dinesha and Vasa Seshagiri Rao held that the “transaction value” under Section 4 of the Central Excise Act must reflect the actual commercial agreement between the parties and cannot be based on hypothetical or unrealised amounts.

Background:
The appellant, engaged in manufacturing actuators and control heads, cleared goods between January 2014 and March 2015 at an agreed price of ₹260 per unit. Subsequently, citing increased raw material costs, it unilaterally revised the price to ₹390 per unit and issued supplementary invoices, paying differential excise duty.

However, the buyer refused to accept the revised price and declined to pay the additional amount. The appellant then sought a refund on the ground that the enhanced price was never realised and therefore could not form part of the assessable value.

Key Findings:
The Tribunal emphasised that:

• “Price actually paid or payable” under Section 4 implies a legally enforceable obligation.
• A unilateral price revision, not accepted by the buyer, does not create such an obligation.
• The original transaction value of ₹260 per unit had already crystallised at the time of clearance.

It noted that the supplementary invoices were neither accepted nor accounted for by the buyer, and no CENVAT credit was availed. Therefore, the revised price never attained the character of a valid transaction value.

Rejecting the Department’s reliance on cost escalation, the Tribunal clarified that Section 4 does not permit substitution of transaction value with cost-based valuation except in specific circumstances, which were absent in the present case.

Unjust Enrichment & Limitation:
On the issue of unjust enrichment, the Tribunal found no evidence that the duty burden had been passed on. Since the buyer neither paid the differential amount nor availed credit, the bar under Section 11B was held inapplicable.

The Tribunal also rejected the Department’s argument on limitation, holding that the refund claim was filed within the prescribed one-year period from the date of payment of duty.

Conclusion:
Holding that the differential duty was paid on a notional and unrealised value, the Tribunal concluded that such duty was not legally payable and must be refunded. The impugned order was set aside and the appeal was allowed with consequential relief.

Case Details:

Decision Date: 27 April 2026

Case Title: M/s Woory Automotive India Pvt. Ltd. v. Commissioner of GST & Central Excise

Case No.: Excise Appeal No. 41551 of 2018