2015 (4) TMI 205 - CGOVT - Central Excise

Denial of rebate claim - values declared in ARE-1 form were more than value declared in shipping bills and the value declared in ARE-1 was not correct transaction value in terms of section 4 of Central Excise Act, 1944 - correct transaction value was arrived at after deducting freight and insurance from commercial price (CIF), that the rebate claim was not admissible on free samples - Held that - Any amount paid in excess of duty liability on one's own volition cannot be treated as duty. But it has to be treated as a voluntary deposit with the Government which is required to be returned in the manner in which it was paid as the same amount cannot be retained by Government without any authority of law. - refund in cash of higher duty paid on export product which was not payable, is not admissible and refund of said excess paid duty/amount in Cenvat Credit is appropriate. As such the excess paid amount/duty may be returned to the respondent in the manner in which it was paid by him initially. - Government directs that excess paid amount of ₹ 1,43,134/- and ₹ 37,484/- which is a voluntary deposit, may be allowed to be re-credited in the Cenvat Credit account from where it was initially paid. - Decided in favour of assessee.

Summary

Issues:
Rebate claim rejection based on incorrect transaction value and admissibility of rebate on free samples.

Analysis:
The case involves revision applications filed against orders-in-appeal by M/s Alkem Laboratories Ltd. regarding rebate claims rejection by Deputy Commissioner of Central Excise. The rejection was based on discrepancies between values declared in ARE-1 forms and shipping bills, with the declared values not aligning with the correct transaction value as per Section 4 of the Central Excise Act, 1944. Additionally, rebate claims on free samples were deemed inadmissible, leading to the denial of duty refund totaling to Rs. 1,80,618.

The applicant appealed to the Commissioner (Appeals) but faced rejection, prompting them to file revision applications before the Central Government. The applicant argued that they should be allowed to re-credit the excess duty paid on goods and free samples in their Cenvat Credit account, citing relevant government orders and judicial precedents supporting such refunds.

Upon review, the Government noted the original authority's basis for rejecting the rebate claims and upheld the denial of the claims. However, the applicant did not contest this denial but sought re-credit of the excess amount paid. The Government referenced a High Court decision emphasizing that excess amounts paid voluntarily cannot be considered as duty and should be returned in the manner they were initially paid.

Consequently, the Government directed the excess paid amounts of Rs. 1,43,134 and Rs. 37,484 to be re-credited in the Cenvat Credit account, modifying the impugned orders-in-appeal accordingly. The revision applications were disposed of in line with this decision.