2012 (12) TMI 552 - AT - Central Excise

Refund appellants made export of Readymade Garments and filed a refund claim under the provisions of Rule 5 of Cenvat Credit Rules, 2002 read with Notification No. 54/2001-CE - Revenue submitted that Notification No.54/2001 is issued under provisions of Section 3 of the Central Excise Act and fixing tariff value in respect of readymade garments @ 60% of the retail sale price. As the appellant had not fixed any retail sale price, therefore, taking into consideration the price as per market value declared in the shipping bill is taken into consideration as maximum retail price (MRP), refund rejected Held that - There is no requirement of fixing the RSP on the goods for export - as the readymade garment has not been notified under Section 4A of the Central Excise Act, there is no requirement for fixing the RSP on the readymade garments which were exported therefore, provisions of Notification No.20/2001-CE are not applicable - rejecting a part of the refund claim by taking into consideration the provisions of Notification No. 20/2001-CE, is not sustainable

Summary

Issues:
1. Refund claim under Rule 5 of Cenvat Credit Rules, 2002 read with Notification No. 54/2001-CE (NT) dated 29.6.2001.
2. Applicability of Notification No. 20/2001-CE (NT) dated 30.4.2001.
3. Requirement of fixing Retail Sale Price (RSP) on Readymade Garments for export.
4. Interpretation of provisions of Notification No. 20/2001-CE.
5. Admissibility of refund claim in the absence of fixed RSP on exported goods.

Analysis:
The appellants, engaged in manufacturing and exporting Readymade Garments, filed refund claims under Rule 5 of Cenvat Credit Rules, 2002 read with Notification No. 54/2001-CE (NT) dated 29.6.2001, seeking refund of accumulated deemed credit on excisable goods exported under Bond. The Notification allows deemed credit @ 20% of excise duty on final products cleared for export. A show-cause notice was issued denying part of the refund based on Notification No. 20/2001-CE (NT) dated 30.4.2001. The appellant contended that this Notification was not applicable as Readymade Garments exported did not have affixed Retail Sale Price (RSP), and there was no legal requirement to fix RSP for export goods. The appellant relied on a Tribunal decision stating that bulk clearance of garments does not require fixing RSP. The Revenue argued that the Notification fixed tariff value @ 60% of RSP, and in absence of fixed RSP, market value declared in shipping bill was considered as Maximum Retail Price (MRP).

The Tribunal analyzed Notification No. 20/2001-CE and found it fixed tariff value for Readymade Garments @ 60% of RSP declared or required to be declared on retail packages under relevant laws. However, as there was no legal obligation to fix RSP on exported goods and Readymade Garments were not notified under Central Excise Act for RSP fixation, the Tribunal held that provisions of Notification No. 20/2001-CE were not applicable. Consequently, the order denying part of the refund claim based on this Notification was set aside, and the appeals were allowed.