2015 (1) TMI 990 - AT - Central Excise

Variations in value of exported goods after export - Rule 6 of Central Excise Rules - permission for provisional assessment - Held that - Appellant is not required to pay duty on the supplementary invoice raised in the case of completed export as it had exported under claim of rebate, which had been allowed on completion of the export. I also hold that the appellant have not undervalued its goods at the time of export/clearance for export as according to the agreement noticed hereinabove, the tentative price was subjection to variation after end of the financial year on finalization of the accounts and accordingly, there is no suppression or any intention to evade duty etc. on the part of the appellant. In this view of the matter, the show-cause notice is held to be time barred as the appellant is not liable to pay the duty in case of completed export on raising of supplementary invoice. At the subsequent point of time, there can be no demand of any interest for the same when duty itself is not payable. Thus, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Duty payment on supplementary invoice for completed export
2. Time-barred demand of interest
3. Applicability of Circular on export procedures

Analysis:

Issue 1: Duty payment on supplementary invoice for completed export
The case involved M/s. Positive Packaging Industries Ltd. appealing against a show-cause notice alleging incorrect determination of value and duty payment on a supplementary invoice for exports completed under a rebate claim. The appellant argued that duty was not payable for exports and if paid, it was refundable. The Tribunal held that duty was not required on the supplementary invoice for completed exports under a rebate claim, as duty had been allowed on completion of export. The agreement between the parties allowed for price adjustment after finalization of accounts, indicating no intention to evade duty. Therefore, the show-cause notice was deemed time-barred, and the appellant was not liable to pay duty on the supplementary invoice.

Issue 2: Time-barred demand of interest
The appellant contended that the demand of interest was time-barred as the export occurred between August 2006 to March 2007, and the duty on the supplementary invoice was paid in September 2007. Citing Section 11A of the Central Excise Act, the appellant argued that the show-cause notice issued in September 2008, almost two years after the export, was beyond the statutory one-year period. The Tribunal agreed, emphasizing that no interest could be demanded when duty itself was not payable. The impugned order was set aside, and the appeal was allowed in favor of the appellant.

Issue 3: Applicability of Circular on export procedures
The appellant relied on Circular No. 283/117/96-CX, asserting that 'export under claim of rebate' and 'export under bond' should be treated equally as both aimed to remove duty incidence. The Tribunal did not delve deeply into this argument but concluded that the appellant was not liable to pay duty on the completed export under a rebate claim. The impugned order was overturned based on the time-barred nature of the demand and the absence of duty liability on the supplementary invoice for completed exports.

In conclusion, the Tribunal ruled in favor of M/s. Positive Packaging Industries Ltd., setting aside the impugned order and allowing the appeal due to the absence of duty liability on the supplementary invoice for completed exports and the time-barred nature of the demand of interest.