2008 (12) TMI 623 - AT - Central Excise

Rebate - Supplementary invoices raised on foreign buyers - Held that - A claim for the said amount cannot be denied on the ground that rebate is admissible only on the duty on the FOB value and not on the CIF value as long as the same represents the transaction value. In the instant case, there is no dispute that the entire amount of ₹ 16,10,23,430/- including the impugned amount of ₹ 4,50,13,457/- under supplementary invoices had been paid by the assessee as excise duty on the transaction value of the goods - That the ARE1 did not show the additional duty paid on the consignment subsequently cannot also be a reason to deny rebate of part of the duty paid later as per the contract with the assessee s buyer. The exporter is entitled to rebate of the entire duty of excise paid by it on clearance of goods for export - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of rebate amount by the Commissioner.
2. Admissibility of rebate based on CIF value.
3. Interpretation of Circular No. 510/06/2000-CX.
4. Eligibility for rebate of total duty paid on consignment.
5. Recovery of rebate on the basis of claimed value.

Analysis:

1. The Commissioner demanded an amount from the appellant, alleging an erroneously allowed rebate. The rebate was claimed by M/s. Sterlite Industries on consignments of copper cathode and wire rods exported in March and April 2006, based on ARE1s. The dispute arose as the rebate was claimed on CIF value instead of FOB value, leading to the demand for Rs. 4,50,13,457. The Commissioner held that relying on Circular No. 510/06/2000-CX was misplaced, as the rebate should be based on the transaction value under Section 4 of the Central Excise Act.

2. The Tribunal analyzed Rule 18 of Central Excise Rules, which allows rebate on excisable goods exported. The assessee raised provisional invoices for consignments and later adjusted the value based on LME price of copper. The Circular specified that the rebate authority should only verify the admissibility of duty rebate, not the assessment correctness. The appellant, having paid the total duty on consignments, was entitled to rebate on the entire duty paid, irrespective of CIF or FOB value.

3. The Tribunal emphasized that an exporter is entitled to rebate on the entire excise duty paid on goods exported. The dispute over claiming rebate on CIF instead of FOB value was dismissed, as the duty was paid on the transaction value. The rejection of rebate claim by the Commissioner was deemed inconsistent with legal provisions, leading to the setting aside of the recovery order and allowing the appeal.

In conclusion, the judgment clarified the entitlement of exporters to rebate on the total excise duty paid on exported goods, emphasizing that the duty payment on transaction value is crucial for rebate eligibility. The reliance on Circulars and adherence to legal provisions were highlighted to ensure correct application of rebate rules in excise matters.