2018 (2) TMI 15 - HC - Central Excise

Rebate claim - the petitioner s request is that if rebate is not to be granted on such additional amount of CIF value of goods, such extra amount be recredited to the Cenvat account of the petitioner - Held that - undisputed facts are that the petitioner had paid excise duty on CIF value of goods exported. The petitioner does not dispute the stand of the Government of India that excise duty was payable on FOB vale and not on CIF value. The Government of India also does not dispute the petitioner s stand that in such a case the additional amount paid by the petitioner would be in the nature of deposit with the Government which the Government cannot withhold without the authority of law. If these facts are established, a simple corollary thereof would be that the the amount has to be returned to the petitioner. If therefore, the petitioner s request was for re- credit of such amount in Cenvat account, same was perfectly legitimate. The respondents are directed to recredit the excess amount paid by the petitioner categorising as excise duty of CIF value of the goods to the Cenvat credit account. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to order confirming departmental authorities' decisions on rebate claims; Jurisdiction of High Court over the matter; Correct valuation for excise duty on goods exported; Entitlement to rebate on excise duty paid; Refund of excess amount paid by petitioner; Compliance with circulars and previous judgments.

Analysis:
The petitioner challenged an order confirming departmental decisions on rebate claims for excise duty paid on goods exported. The petitioner, engaged in manufacturing textile products, filed rebate claims for a total sum of ?29,06,416 from October 2010 to November 2011. The competent authority granted rebates but restricted them to a small portion of the excise duty paid by the petitioner. The dispute arose from excise duty paid on CIF value of goods, while the authority insisted on FOB value for transaction valuation.

The Government of India, in dismissing revision petitions, held that excise duty should be paid only on FOB value, not CIF value. The excess amount paid on CIF value was considered a voluntary deposit by the petitioner and was to be refunded. The petitioner's request for recredit in Cenvat account was denied. The petitioner argued that once excise duty is paid, it cannot be reassessed, citing a CBEC circular. They also referenced a previous judgment for automatic recredit without a separate application.

Regarding territorial jurisdiction, the High Court found that the cause of action, excise duty payment, occurred within its jurisdiction despite exports from outside. The Court distinguished a previous case where the petitioner's refund claim was rejected by an excise authority in a different state. The Court emphasized that the rebate claim was linked to excise duty paid by the petitioner at the manufacturing unit.

On the merits, it was established that excise duty was paid on CIF value, not disputed by either party. The excess amount paid was deemed a deposit refundable to the petitioner without specific application. The Court directed the authorities to recredit the excess amount paid as excise duty on CIF value to the Cenvat credit account of the petitioner, in line with previous judgments and circulars.

In conclusion, the Court upheld the petitioner's claim, directing the recredit of the excess amount paid as excise duty on CIF value to their Cenvat credit account. The judgment highlighted compliance with circulars and previous decisions, ensuring the rightful refund of the excess amount paid by the petitioner.