2004 (4) TMI 123 - AT - Central Excise

Summary

Issues involved: Valuation of instant coffee sold in the domestic market for levy of central excise duty based on FOB value of exported goods.

The Appellate Tribunal CESTAT, Bangalore, in the case of a 100% Export-Oriented Unit engaged in the production and export of instant coffee, addressed the dispute regarding the valuation of instant coffee sold domestically for central excise duty purposes. The appellant consistently used the FOB value of exported goods for duty payment, which was accepted by the authorities. However, a show cause notice alleged short-levy of Rs. 55 lakhs due to adopting the lower export price as assessable value. The Tribunal noted that Section 3 of the Central Excise Act, 1944 mandates determining domestic goods' value as if imported into India. The appellant argued that the Indian export value could serve as a suitable basis for valuation, supported by Circulars emphasizing acceptance of invoice price akin to FOB value for assessment. The Tribunal agreed with the appellant, highlighting the lack of imports of identical goods and the commercial nature of FOB value, which could be considered a likely import price. The Tribunal found the appellant's consistent duty payment on FOB value justified, despite higher duty paid when domestic prices exceeded export prices. Consequently, the Tribunal allowed the appeals, granting any consequential relief to the appellant.