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2015 (3) TMI 823 - CGOVT - Central ExciseDenial of rebate claim - rebate claims were sanctioned of duty paid on value which was more than transaction value - Held that - Rebate of duty paid on transaction value of goods determined under section 4 of Central Excise Act 1944 is admissible under rule 18 of Central Excise Rules 2002 read with Not. No. 19/04-CE(NT) dated 6.9.2004, Government had reiterated the findings of GOI 2005 (7) TMI 120 - GOVERNMENT OF INDIA in the case of M/s Bhagirath Textiles wherein it was held that exporter is not liable to pay duty on CIF value of goods but duty is to be paid on transaction value determined under Section 4. - there cannot be any strict statutory relied upon citation which can be taken as guiding precedents because each one of above citation have different background of factual merits pertaining to manufacturers manufacturing goods of different sub-headings following different set of Notifications, choosing different beneficial schemes and changing thereof in between a given financial year thereby leading to arise of different question of law. Difference in AREs-1 value and FOB value given in the Shipping Bill is due to the difference in calculations only and the same cannot be attributed to freight & Insurance charges. Applicant has claimed that difference in ARE 1/FOB value is due to difference in foreign exchange rates adopted in the case of ARE-1 & Shipping Bills. In this regard Government observes that CBEC has clarified in Circular No. 510/06/2000-Cx dated 3.02.2000 that there is no question of requantifying the amount of rebate by applying some other rate of exchange prevalent of subsequent the date on which the duty was paid. From this, it is quite clear that the rebate amount need not be changed if the difference in both values is due to difference in exchange rate subject to condition that value represents transaction value - Commissioner (Appeals) has erred in setting aside the sanction of entire rebate claims. As such, the sanction of impugned rebate claim excluding the disputed amount of ₹ 55661/- and ₹ 1975/- is upheld and impugned orders-in-original are restored to this extent. The impugned order-in-appeal is also modified to this extent. The matter is required to be remanded back to original authority to decide afresh the rebate claims to the extent of disputed amounts of ₹ 55661/- and ₹ 1975/- only. - Decided in favour of appellants.
Issues Involved:
1. Rebate claims on duty paid on exports. 2. Transaction value versus FOB value. 3. Jurisdiction and authority of Commissioner (Appeals) to remand cases. 4. Applicability of CBEC circulars and previous judgments. Detailed Analysis: 1. Rebate Claims on Duty Paid on Exports: The original authority sanctioned the rebate claims for M/s Chemagis India Pvt. Ltd. and M/s Dy-Mach Pharma. The department contested the rebate claims of Rs. 55,661 and Rs. 1,975, arguing that the value declared in ARE-1 was more than the FOB value in the Shipping Bills. The excess value included freight and insurance, which should not be part of the transaction value under Section 4 of the Central Excise Act, 1944. The Commissioner (Appeals) allowed the department's appeals, setting aside the orders-in-original. 2. Transaction Value versus FOB Value: The applicants argued that the duty paid on exports, including freight and insurance, should be rebated. They cited previous decisions, including Sterlite Industries and SPL Industries, where such duty was rebated. They contended that the transaction value should include all costs unless shown separately in the invoice. The government observed that the rebate should be on the transaction value determined under Section 4 of the Central Excise Act, 1944, excluding freight and insurance beyond the port of export. The government upheld that any excess amount paid as duty on CIF value is not admissible as rebate. 3. Jurisdiction and Authority of Commissioner (Appeals) to Remand Cases: The department argued that the Commissioner (Appeals) has no power to remand cases after the amendment to Section 35A(3) of the Central Excise Act, 1944, effective from 11-5-2001. The Commissioner (Appeals) had set aside the orders-in-original without confirming the excess rebate amounts or providing directions for fresh adjudication. The government noted that the Commissioner (Appeals) should have passed a speaking order and not merely set aside the orders-in-original. 4. Applicability of CBEC Circulars and Previous Judgments: The applicants relied on CBEC Circular No. 510/06/2000-Cx dated 3.2.2000, which states that the duty element shown on AR-4 should be rebated if certified by the jurisdictional Range officer. The government observed that the provisions of Notification No. 19/04-CE(NT) dated 6.9.2004 prevail over the circular. The government also referenced previous judgments, including M/s Bhagirath Textiles Ltd. and M/s Escort JCB Ltd., which held that duty is not to be paid on CIF value but on the transaction value under Section 4 of the Central Excise Act, 1944. Conclusion: The government remanded the matter back to the original authority to decide afresh the rebate claims to the extent of disputed amounts of Rs. 55,661 and Rs. 1,975. The original authority is instructed to verify if the difference in ARE-1 value and FOB value is due to exchange rate differences and not freight and insurance. The original authority must provide a reasonable opportunity of hearing to the concerned parties. The revision applications are disposed of accordingly.
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