2012 (10) TMI 414 - CGOVT - Central Excise

Rebate claims export alleged that adjudicating authority has erred in sanctioning rebate amount in cash without ascertaining the correct value under Section 4 of the Central Excise Act, 1944 and without deducting from FOB value of all post removal expenses incurred factory gate onwards whether in case of export, the place of removal is not factory gate but the place where the delivery of the consignment is given to the buyer and property in the form of goods is passed on to the buyer 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 - department has not determined the place of removal as per the statutory provision - it is essential to first determine the place of removal and then decide as to what shall be the assessable value under Section 4 - original authority directed to determine the place of removal taking into account the above observation and decide the rebate claims accordingly

Summary

Issues Involved:
1. Determination of the place of removal for the purpose of calculating the assessable value under Section 4 of the Central Excise Act, 1944.
2. Eligibility of rebate claims on Central Excise duty paid on exported goods.
3. Interpretation of statutory provisions related to the valuation of excisable goods and the place of removal.

Detailed Analysis:

Issue 1: Determination of the Place of Removal
The primary issue addressed in the judgment is the determination of the place of removal for the purpose of calculating the assessable value under Section 4 of the Central Excise Act, 1944. The Applicant Department contended that the place of removal is the factory gate, and thus, all post-removal expenses from the factory gate to the port of export should be deducted from the FOB value to arrive at the assessable value.

The Commissioner (Appeals) rejected this contention, stating that the place of removal in the case of export is not the factory gate but the place where the delivery of the consignment is given to the buyer, i.e., the port of export. The Government observed that the definition of the place of removal under Section 4(3)(c) includes a factory, warehouse, depot, or any other place from where the excisable goods are to be sold after their clearance from the factory. The Government concluded that the place of removal in export cases is the port of export where the sale takes place, aligning with the Commissioner (Appeals)'s view.

Issue 2: Eligibility of Rebate Claims
The respondents filed rebate claims for the Central Excise duty paid on goods exported under Rule 18 of the Central Excise Rules, 2002. The adjudicating authority initially sanctioned these claims, but the Applicant Department argued that the rebate amount in cash was sanctioned without correctly determining the value under Section 4 of the Central Excise Act, 1944.

The Government noted that the rebate claims should be sanctioned based on the transaction value, which should conform to Section 4 or Section 4A of the Central Excise Act, 1944. The Government directed the original authority to determine the place of removal and then decide the rebate claims accordingly, ensuring that the principles of natural justice are followed.

Issue 3: Interpretation of Statutory Provisions
The judgment involved interpreting various statutory provisions related to the valuation of excisable goods and the place of removal. The Government referred to Section 4(1)(a) and Section 4(3)(c) of the Central Excise Act, 1944, and Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The Government emphasized that the place of removal should be determined within the geographical limits of India, and the port of export is considered the place of removal for export transactions.

The Government also referred to the C.B.E.C. (Section) 37B order 59/1/2003-CX., dated 3-3-2003, which clarified that the assessable value is to be determined at the place of removal, which includes the factory gate, warehouse, or depot. The Government concluded that the place of removal for export cases is the port of export, where the sale takes place.

Conclusion
The Government upheld the Commissioner (Appeals)'s decision, directing the original authority to determine the place of removal and decide the rebate claims accordingly. The judgment emphasized the importance of determining the place of removal based on statutory provisions and ensuring that the principles of natural justice are followed in the decision-making process. The revision applications were disposed of accordingly.