2013 (10) TMI 1300 - CGOVT - Central Excise

Denial of rebate claim - Valuation of goods - rebate of re-credited Cenvat amount in cash. - Held that - Place of removal may be factory/warehouse a depot premise of a consignment agent or any other place of removal from where the excisable goods are to be sold for delivery at place of removal. - Government observes that once the place of removal is decided within the geographical limit of the country it cannot be beyond the port of loading of the export goods. Under such circumstances the place of removal is the port of export where sale takes place. The appellate authority s observation that it is quite possible that the parties enter into any agreement under which the exporter is obliged to deliver the goods to the Shipping Company and in such a case the place of delivery may be the place of removal is not tenable. Whole duty of excise would mean the duty payable under the provisions of Central Excise Act. Any amount paid in excess of duty liability on one s own volition cannot be treated as duty. But it has to be treated simply a voluntary deposit with the Government which is required to be returned to the respondent in the manner in which it was paid as the said amount cannot be retained by Government without any authority of law - ocean freight as mentioned in the shipping bill cannot form part of value determined under Section 4(1)(a) in view of above discussed statutory provision. Original authority has rightly allowed the rebate claim of the duty paid on value of exported goods as determined under Section 4 of Central Excise Act 1944. Government therefore sets aside the impugned Orders-in-Appeal and restores the impugned Order-in-Original. - Decided in favour of assessee.

Issues Involved:
1. Eligibility of rebate claims on the basis of transaction value versus CIF value.
2. Correct assessable value under Section 4 of the Central Excise Act, 1944.
3. Appropriateness of re-crediting excess duty paid into the Cenvat credit account.
4. Admissibility of cash rebate for the differential amount between assessable value and FOB value.

Detailed Analysis:

1. Eligibility of Rebate Claims on the Basis of Transaction Value versus CIF Value:
The central issue revolves around whether the rebate claims should be based on the transaction value as per Section 4 of the Central Excise Act, 1944, or the CIF (Cost, Insurance, and Freight) value. The Assistant Commissioner initially sanctioned rebate claims based on the transaction value, which excludes overseas freight and insurance, adhering to Section 4. The Commissioner (Appeals) later allowed cash rebates based on the CIF value, which was contested by the department.

2. Correct Assessable Value Under Section 4 of the Central Excise Act, 1944:
The judgment emphasizes that the correct assessable value under Section 4 is the transaction value, which excludes post-removal expenses like overseas freight and insurance. The transaction value is defined as the price actually paid or payable for the goods when sold, excluding any amount charged for post-removal expenses. The original authority's decision to base the rebate on the transaction value was upheld, as it aligns with the statutory provisions of Section 4(1)(a) and 4(3)(d).

3. Appropriateness of Re-crediting Excess Duty Paid into the Cenvat Credit Account:
The original authority allowed the re-credit of excess duty paid into the Cenvat credit account, which was challenged by the Commissioner (Appeals) who allowed cash rebates instead. The judgment clarifies that any excess amount paid beyond the transaction value should be treated as a voluntary deposit and should be returned in the manner it was initially paid. The decision to re-credit the excess amount into the Cenvat credit account was deemed appropriate, as supported by precedents and statutory provisions.

4. Admissibility of Cash Rebate for the Differential Amount Between Assessable Value and FOB Value:
The judgment scrutinizes the Commissioner (Appeals)' decision to allow cash rebates for the differential amount between the assessable value and the FOB value. It was concluded that the rebate should only be sanctioned on the transaction value, and any excess duty paid should not be refunded in cash but re-credited to the Cenvat account. The judgment references multiple legal precedents and statutory provisions to support this conclusion, including the Supreme Court's decision in the case of M/s. Escort JCB Ltd. v. CCE, Delhi and various CBEC circulars.

Conclusion:
The judgment sets aside the Orders-in-Appeal and restores the Orders-in-Original, reaffirming that the rebate claims should be based on the transaction value as per Section 4 of the Central Excise Act, 1944. The excess duty paid should be re-credited into the Cenvat credit account and not refunded in cash. The revision applications filed by the department were allowed, and the original authority's decision was upheld.

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