2002 (12) TMI 529 - AT - Central Excise

Summary

Issues:
- Determination of assessable value for goods exported under claim for rebate.
- Relevance and applicability of Circular dated 10-4-1986 in assessing the issue.
- Consideration of Circular No. 510/06/2000, dated 3-2-2000 by the Commissioner in the decision-making process.

Analysis:
1. Determination of Assessable Value: The appeal involved a dispute regarding the determination of assessable value for goods exported under claim for rebate between 30-11-95 to 26-11-97. The appellants cleared 45 consignments for export on duty payment under rebate claim as per Rule 12 of Central Excise Rules, 1944. The issue arose when a show cause notice alleged under-valuation of export consignments and consequent short-payment of duty. The appellants argued that they declared F.O.B. value instead of Section 4 value, emphasizing they had no benefit in declaring lower F.O.B. values. They contended that had they declared Section 4 values and paid duty, they could have claimed higher rebate. The department did not dispute the export of consignments, and rebate claims were processed and paid upon proof of export.

2. Relevance of Circular dated 10-4-1986: The consultant for the appellants highlighted the significance of Circular No. 10/86 issued by the Board on 10-4-1986, which accepted F.O.B. value as assessable value for goods meant for export. The Circular was in force until replaced by another circular in 1996. The consultant argued that the demand was time-barred and the Commissioner failed to consider the 1986 Circular, which was relevant for the assessment period. The Circular clearly stated that F.O.B. value would apply for goods proved to be exported, emphasizing its importance in determining the assessable value for the exports in question.

3. Consideration of Circular No. 510/06/2000: The Revenue representative referred to Circular No. 510/06/2000, dated 3-2-2000, which the Commissioner relied upon in the order. However, it was acknowledged that this circular was not relevant to the issue at hand as it pertained to a period postdating the exports in question. The Circular dated 10-4-1986 was deemed applicable to the case, and the failure of the Commissioner to consider this relevant circular in the decision-making process was noted. The appellate tribunal found merit in the arguments presented by the assessee, emphasizing the binding nature of the Circular and the incorrectness of the Commissioner's decision based on a subsequent circular irrelevant to the issue.

4. Judgment: After careful consideration of the submissions from both sides, the appellate tribunal concluded that the Circular dated 10-4-1986 was pivotal in determining the assessable value for the exports under dispute. The tribunal found no justification to uphold the impugned order by the Commissioner, as the decision was based on an irrelevant circular. Consequently, the tribunal set aside the impugned order, allowing the appeal with any consequential relief deemed necessary.