2015 (1) TMI 848 - CGOVT - Central Excise

Denial of rebate claim - applicant cleared the goods by following self sealing procedure, and good were not physically examined at the port of export and hence the provision of the para 3(xiv) of the Notification No. 19/2004-CE/(NT) dated 06.09.2004 were violated - Held that - applicants can clear the goods from factory premises for export either under Central Excise supervision as mentioned in para 3(a)(i) of the Notification No. 19/2004-CE/(NT) dated 06.09.2004 or under self sealing procedure as prescribed in para 3(a)(ii) of the said notification. The applicants chose to dear the goods from factory for export by following procedure as provided in said section 3(a)(ii). There is no allegation of violation of said provision of para 3(a)(ii). Further, there is no allegation in impugned orders that the goods cleared under self sealing procedure for export, were not exported and diverted elsewhere. The applicants submitted before the original authority that they delivered the said goods to ICD and the packages were stuffed in container in the presence of customs officer and the containers were sealed with OTS; the OTS numbers were in mentioned on AREs-1 which was certified by the customs officer and no discrepancy was noticed by customs authorities. These submissions were nowhere controverted by the original authority to reach at the conclusion that goods cleared for factory were not actually physically exported. Further, when the applicant in column (11) of impugned AREs-1 has clearly mentioned thcthey exported the goods under claim of rebate, merely wrongly striking out availing facility under Notification No. 19/2004-CE/(NT) dated 06.09.2004 cannot make them ineligible for rebate claims. As such, rebate claim cannot be rejected on these grounds especially when the applicant substantially complied with provisions of Notification No. 19/2004-CE/(NT) dated 06.09.2004. - original authority while declining to accept the declared ARE-1 value as transaction value under section 4 of Central Excise Act, 1944 for the purpose of sanction of rebate as goods were exported to their holding company; has not arrived at correct transaction value. Since, the said exports are made to their parent holding company in Germany the correct transaction value was required to be, determined in terms of section 4 of Central Excise Act 1944. Original authority should have conducted proper enquiry in the matter and then decided the matter as per law. As such matter is required to be remanded back for fresh consideration. - Decided in favour of assessee.

Summary

Issues:
- Rejection of rebate claims based on procedural non-compliance
- Allegation of goods not being physically examined at the port of export
- Export to a related party without filing costing certificates or declarations
- Correct determination of transaction value for exports to a related party

Analysis:
The revision applications were filed against the rejection of rebate claims by M/s Siemens Ltd. The applicants cleared goods for export under self-sealing, not availing the facility under Notification No. 19/2004-CE. Customs officers did not physically examine the goods, leading to a show cause notice for contravention of Central Excise Rules. The adjudicating authority rejected the rebate claim, citing the initial declaration by the applicants. Appeals before the Commissioner were also dismissed.

In response, the applicants argued that the consignment was duly examined by customs officials and that the self-sealing procedure was followed correctly. They highlighted specific remarks on documents signed by customs officers and argued that the requirements of the notification were fulfilled, despite a clerical error. The applicants emphasized their compliance with export procedures and valuation norms, citing relevant circulars and income tax laws.

The government reviewed the case records and observed that the rejection was primarily based on procedural grounds and export to a related party without proper declarations. However, it found that the applicants complied with the self-sealing procedure and there was no evidence of diversion of goods. The government directed a reevaluation of the cases, emphasizing the need for proper determination of transaction value for exports to related parties under Central Excise Act.

In conclusion, the impugned Orders-in-Appeal were set aside, and the cases were remanded for fresh consideration. The applicants were instructed to submit necessary valuation data within a specified timeframe. The government emphasized affording a reasonable opportunity of hearing to all concerned parties for a fair decision-making process.