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TMI Blog2013 (11) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... at excess paid duty i.e. duty paid on part of value exceeding transaction value is to be treated a voluntary deposit with Government and same is to be returned in the Cenvat Credit account from which said duty was paid. Adjudicating authority has directed the applicant to approach jurisdictional authorities for allowing re-credit in their Cenvat Credit account. In this regard, Government directs the jurisdictional Central Excise authorities to allow the re-credit of said excess paid amount in their Cenvat Credit account. Interest on delayed payment u/s 11BB of Central Excise Act,1944 – Held that:- On delayed payment of refund claims interest is paid under Section 11BB of the Central Excise Act, 1944 after the expiry of three months of the date of receipt of application for rebate in the Divisional offices in terms of Section 11BB – Following M/s. Ranbaxy Laboratories Ltd. v. UOI [2011 (10) TMI 16 - Supreme Court of India] - liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the period from the date on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the action has to be referred to the jurisdictional Excise authority (certification carried out in the triplicate copy of the ARE-1) as per the C.B.E. C. Circular binding on the department. 3.3 The Revisionary Authority, Government of India has ruled in case of Sterlite Industries as well as SPL Industries that duty paid on exports on transaction value, which includes freight and insurance is to be rebated. The said decision is binding as the same is not varied/reversed by any higher authority. The Revisionary Authority, GOI cannot decide its own decision. It cannot be the case of RA, GOI that the law is different for big cases like Sterlite and different interpretation prevails in the case of small exporters. The judicial discipline needs to be maintained. The CESTAT has ruled in umpteen cases in case of rebate that freight and insurance are part of the transaction costs and the said decisions have not been reversed by any higher authority. Once again, as per the settled principles of law the decision is binding and judicial discipline needs to be observed. 3.4 The definition of transaction value is not being applied as provisioned in the law but only the favourable part t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be excluded if not shown separately in the invoice as already explained in detail hereinabove. There is no provision in law, which says that freight payable for movement of goods to foreign destination is not chargeable to Excise. 3.9 We therefore pray that the impugned order may please be set aside because freight and insurance are part of the transaction value as accepted by the Revisionary Authority in case of SPL Industries and Sterlite Industries supra; the assessment order under the ARE-1 is not challenged (even in the case of self-assessment order needs to be challenged as decided in case of Maharashtra Cylinders (supra) and the assessee has followed the C.B.E. C. Circular, which is binding on the department. Without challenging the assessment, there cannot be any possibility to deny the rebate claim in cash. 3.10 Applicant have also relied upon C.B.E. C. Circular No. 510/6/2000-CX., dated 3-2-2000 and submitted that rebate sanctioning authority should not examine the correctness of assessment but should examine only the admissibility of rebate of duty paid on exported goods. 4. Applicants vide letter dated 18-12-2012 have filed additional written submission ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of exports because the freight and insurance are part of the sale value directly attributable to it therefore freight and insurance cannot be excluded if not shown separately in the invoice as already explained in detail hereinabove. The RA, GOI cannot go beyond the statute, which states that outward handling is part of the transaction value and come out with interpretation/read into the law, what is not specified therein. The transaction value is to be stated in the excise invoice for the removal of the goods and this is the value received in the exchange of goods excluding only the taxes and duties included in it. There is no provision in the law, which says that freight payable for movement of goods to a foreign destination is not chargeable to Excise. We fully agree that jurisdiction of the Central Excise Act, 1944 extends to the whole of India but this cannot lead to absurd interpretation that if the terms of the contract are for delivery at the factory/warehouse of the recipient abroad then too the freight and insurance are not part of the expense directly related to the sale and therefore not part of the transaction value, which is contrary to the definition of transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess payment cannot be denied in defiance of the C.B.E. C. Circular/Supreme Court decision. The RA, GOI is therefore required to establish by way of a reasoned order that how violation of the Article 265 of the Constitution can be allowed to be permitted and the excess amount lying with the Government can be pocketed by the Government by just giving no decision in respect of this excess amount. 4.4 The valuation of the samples for the payment of the duty has to be carried in terms of section 4(1)(b) of the Central Excise Act, 1944 because in case of samples, the goods are supplied free of cost and they are not sold. The same reads as : In any case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Therefore, it is wrong on the part of the Deputy Commissioner (Rebate) to conclude that the value of the samples is zero because the statute in itself says that when goods are not sold, their value is to be determined in the prescribed manner. 4.5 The market value of the samples is not zero because duty payment is ad valorem at the time of the removal of the goods. The department cannot collect duty at the time of remo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply dated 18-12-2012. 6. Government has carefully gone through the relevant case records and perused the impugned orders. Since a common issue is involved in all these cases, so they are taken up for decision by this common order. 7. Government notes that in these cases the rebate of duty involved on FOB value of exported goods is sanctioned on the ground that said value was the transaction value of exported goods in terms of Section 4 of Central Excise Act, 1944. Applicants have claimed that buyer had placed order on CIF basis and the contract represents the composite price and thus the freight and insurance is includible for determination of transaction value. They have contended in their revision applications that they are entitled for full rebate of duty paid on CIF value as mentioned on the relevant ARE-1 forms on the grounds mentioned in paras 3 4 above. 8. Government notes that the said issue in the case of applicants was decided vide GOI Order Nos. 124-135/2012-CX., dated 14-2-2012. The operative portion of said order is reproduced as under :- 8. Government notes that the above first point of valuation, the issue already stands deliberated upon and decided in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes - (i) The actual cost of transportation; and (ii) In case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purpose of determining the value of the excisable goods. 8.5 Government observes that from the perusal of above provisions it is clear that the place of removal may be factory/warehouse, a depot, premise of a consignment agent or any other place of removal from where the excisable goods are to be sold for delivery at place of removal. The meaning of word any other place read with definition of Sale , cannot be construed to have meaning of any place outside geographical limits of India. The reason of such conclusion is that as per Section 1 of Central Excise Act, 1944, the Act is applicable within the territorial jurisdiction of whole of India and the said transaction value deals with value of excisable goods produced/manufactured within this country. Government observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , sub-clauses (i), (ii) and (iii)], was the factory gate, warehouse or the depot or any other premises from where the goods were to be sold. Though the definition of place of removal was amended with effect from 1-7-2000, the point of determination of the assessable value under section 4 remained substantially the same. Section 4(3)(c)(i) [as on 1-7-2000] was identical to the earlier provision contained in section 4(4)(b)(i), section 4(3)(c)(ii) was identical to the earlier provision in section 4(4)(b)(ii) and rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, took care of the situation covered by the earlier section 4(4)(b)(iii). In the Finance Bill, 2003 (clause 128), the definition place of removal is proposed to be restored, through amendment of section 4 to the position as it existed just prior to 1-7-2000. 8. Thus, it would be essential in each case of removal of excisable goods to determine the point of sale . As per the above two Apex Court decisions this will depend on the terms (or conditions of contract) of the sale. The insurance of the goods during transit will, however, not be the sole consideration to decide the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ardless of mode of payment of said higher excise duty - Petitioner is entitled to cash refund only of the portion deposited by it by actual credit and for remaining portion, refund by way of credit is appropriate. 8.1 Government has 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 Notfi. No. 19/2004-C.E. (N.T.), dated 6-9-2004. Government had reiterated the findings of GOI Order No. 271/2005, dated 25-7-2005 in the case of M/s. Sri Bhagirath Textiles - 2006 (202) E.L.T. 147 (GOI) 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. Government notes that said issue in the case of applicants in GOI Order Nos. 1274-1369/2011-CX., dated 30-9-2011, 1631-1708/2011-CX., dated 22-12-2011 and 1008-1033/2011-CX., dated 11-8-2011. 8.2 Applicants have now relied heavily on C.B.E. C. Circular No. 510/6/2000-CX., dated 3-2-2000 and above GOI Order No. 1685/2010-CX., dated 3-11-2010 and 1805/2010-CX., dated 24-12-2012 in the cases of M/s. SPL Industries, Fari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in case of Escorts Ltd. v. CCE, Delhi-II - 2004 (173) E.L.T. 113 (S.C.) which inter alia stipulates precedent - circumstantial flexibility - One additional or different fact may make a world of difference between conclusion of two cases - Disposal of two cases by blindly placing reliance on a decision, not proper - In para 11 of said judgment following observations are made :- 11. The following words of Lord Denning in the matter of applying precedents have become locus classicus :- .... Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect in deciding such cases. One should avoid temptation to decide cases by matching the colour of one case against the colour of another Therefore, 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 financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment notes that said notification issued under Rule 18 of Central Excise Rules, 2002, prescribes the conditions, limitations and procedure to be following for claiming as well as sanctioning rebate claims of duty paid on exported goods. The satisfaction of rebate sanctioning authority requires that rebate claim as per the relevant statutory provisions is to be in order. He does not have the mandate to sanction claim of obviously excess paid duty and then initiate proceeding for recovery of the erroneously paid rebate claim. Therefore, the circular of 2000 as relied upon by applicant cannot supersede the provisions of Notification No. 19/2004-C.E. (N.T.). Adjudicating authority has therefore rightly sanctioned the part rebate claim, and also rightly held that any amount paid in excess of duty liability on one s own volition cannot be treated as duty and it has to be treated a voluntary deposit with the Government which is required to be returned to the assessees/respondents in the manner in which it was paid as the said amount cannot be retained by Government without any authority of law. Hon ble High Court of Punjab Haryana at Chandigarh vide order dated 11-9-2008 in CWP Nos. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-TIOL-105-SC-CX = 2011 (273) E.L.T. 3 (S.C.) = 2012 (27) S.T.R. 193 (S.C.), has as under :- 10.1 Government notes that on delayed payment of refund claims interest is paid under Section 11BB of the Central Excise Act, 1944 after the expiry of three months of the date of receipt of application for rebate in the Divisional offices in terms of Section 11BB ibid. This is already decided by Hon ble Supreme Court in the case of M/s. Ranbaxy Laboratories Ltd. v. UOI reported on 2011-TIOL-105-SC-CX = 2011 (273) E.L.T. 3 (S.C.) = 2012 (27) S.T.R. 193 (S.C.) has categorically held as under : 9. It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2008, dated 24-7-2008 passed by Commissioner of Central Excise (Appeals), Mumbai Zone-II, had upheld the impugned orders-in-appeal and held that in terms of Section 11BB interest is payable after expiry of three months from the date of receipt of refund/rebate application. Department contested the said GOI Order dated 17-3-2011 by filing WP No. 9100/2011 in Bombay High Court who in its judgment dated 30-1-2012 has upheld the Government Order vide GOI Order No. 247/2011-CX., dated 17-3-2011. The observations of Hon ble High Court in paras 2, 3 of said judgment are reproduced below : 2. Counsel appearing on behalf of the Petitioner submitted that the entitlement of the Respondent to a rebate was crystallized only on 6 December 2007 when the notice to show cause was dropped by the Commissioner of Central Excise. The rebate claims were sanctioned within a period of three months thereafter by the Assistant Commissioner (Rebate) and hence, no interest was payable. On the other hand, it has been urged on behalf of the respondent that the law has been settled by the judgment of the Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India and consequently no interference in the exer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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