2014 (2) TMI 57 - HC - Central Excise

Inclusion of value of deemed export - Whether value of deemed export is required to be excluded while determining FOB value of export for the purpose of computation of value of the Exim Policy Held that - clearances made by one 100% EOU to another 100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004 - Following decision of Commissioner of Central Excise v. Shilpa Copper Wire Industries 2010 (2) TMI 711 - GUJARAT HIGH COURT - Decided against Revenue.

Summary

Issues:
1. Appeal against the judgment of the Customs, Excise and Service Tax Appellate Tribunal.
2. Interpretation of the term "free on board value of export" under the EXIM policy.
3. Validity of the Tribunal's decision in light of circulars and previous judgments.
4. Consistency of the impugned order with previous tribunal decisions and High Court judgments.

Analysis:

Issue 1:
The Revenue appealed against the Tribunal's judgment, questioning the dismissal of the appeal solely based on a decision referred to by the Commissioner without addressing the revenue's contentions. The Tribunal's decision was challenged on the grounds of legal errors and lack of findings on the points raised by the revenue.

Issue 2:
The case involved determining whether the term "free on board value of export" includes the value of domestic clearances for extending the benefit of exemption notification to the respondent. The dispute arose from the respondent's claim for tax exemption based on the FOB value, which encompassed sales to 100% EOUs in DTAs.

Issue 3:
The Tribunal's decision was questioned for being inconsistent with a circular issued by the Department and previous judgments, particularly the Madras High Court's decision in BAPL Industries Ltd. v. Union of India. The validity of the circular and its applicability to the case was a significant point of contention.

Issue 4:
The Revenue relied on previous tribunal decisions and High Court judgments to challenge the impugned order. The court referred to cases like Jumbo Bag Limited and Shilpa Copper Wire IndustriesPage to assess the consistency of the impugned order with established precedents. The court also considered the decision in the case of Bannari Amman Sugars Ltd. v. Commissioner of Central Excise, Salem, as confirmed by the Supreme Court.

The High Court dismissed the Revenue's appeal, citing previous decisions and the binding nature of the court's own rulings. The court emphasized adherence to its earlier judgments, such as in the case of Commissioner of Central Excise v. Shilpa Copper Wire Industries, and rejected the Revenue's arguments based on the Madras High Court's decision in BAPL Industries Ltd. v. Union of India. The court's decision was guided by the principle of following established legal precedents and maintaining consistency in judicial interpretation.