2004 (7) TMI 462 - AT - Central Excise

Summary

Issues:
1. Inclusion of exempted Basic Customs duty in assessable value for levying Additional Customs duty.

Analysis:
The appeal raised the issue of whether the Basic Customs duty, exempted from payment, should be considered in the assessable value for the purpose of levying Additional Customs duty. The appellant, a 100% E.O.U., contended that they had paid duty in excess due to including the exempted Basic Customs duty in the assessable value. The Asstt. Commissioner had sanctioned a refund, but the Commissioner (Appeals) set it aside. The appellant argued that only the chargeable amount of Basic Customs duty should be added to the assessable value for calculating Additional Customs duty, and since the chargeable amount was nil due to exemption, the duty should be calculated on the assessable value itself without adding any other element.

On the other hand, the Revenue argued that as per the proviso to Section 3(1) of the Central Excise Act, the duty should be equal to the aggregate of the duty of Customs leviable on like goods imported into India. They contended that the Basic Customs duty should be included in the assessable value for levying Additional Customs duty, as per the provisions of the Customs Tariff Act.

The Tribunal analyzed the submissions and relevant provisions. It noted that the exemption under Notification No. 82/92-C.E. applied to excisable goods manufactured by a 100% E.O.U. and cleared against certain licenses. The exemption was available only to the extent of Basic Customs duty and Additional Customs duty leviable on like goods imported into India. Since no Basic Customs duty was chargeable in the present case, the assessable value should only include the value of the goods without adding any Basic Customs duty. The Tribunal held that as the duty of Customs chargeable was nil, there was no need to add any Basic Customs duty to the assessable value. Therefore, the impugned order was set aside, and the appeal was allowed.