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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 ..... 44 by the original and appellate authority. The applicants had claimed rebate of duty paid on CIF value of export goods which was declared on the relevant ARE-1 forms. In cases at Sr. No. 1-4 of table in para 1, Commissioner (Appeals) has allowed interest on delayed payment of rebate claims under Section 11BB of Central Excise Act, 1944 whereas in the impugned orders-in-appeal at Sr. Nos. 5 to 7 of above table, there is no order as regard to payment of interest. Similarly in orders-in-appeal at Sr. Nos. 1 to 6, there is no order with regard to refund of differential duty paid on CIF value as stated ARE-1 form. 3. Being aggrieved with the impugned orders-in-appeal, the applicants have filed these revision applications on the following common grounds :- 3.1 The erstwhile Commissioner (Appeals), Mumbai-II Mr. Y.D. Banga had decided the issue and upheld in numerous orders that factory gate is not the place of removal in case of exports. 3.2 The rebate sanctioning authority has no authority to question the assessment carried out by the jurisdictional Excise authority and if there is a discrepancy then the action has to be referred to the jurisdictional Excise authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as on the date of the Let Export Order. However, there is no such corresponding provision in the Central Excise Law. Therefore, it is not necessary that FOB value of export in the S/B will be the assessable value under ARE-1 for the payment of duty. 3.7 The Government of India's orders in Revision Nos. 1685/2010-CX., dated 3-11-2010 and 1805/2010-CX., dated 24-12-2010 in the cases of M/s. SPL Industries, Faridabad and M/s. Sterlite Industries (India) Ltd., Tuticorin respectively are of binding nature. Therefore going against these orders without citing the differences is not legally tenable. These orders are binding and need to be followed until the same are set aside/reversed by any higher authority. 3.8 The department has also taken a plea in the past that freight and insurance beyond the port of export cannot be part of the transaction value for the jurisdiction of the Central Excise Act, 1944 extends to the whole of India and not beyond. This statement is not legally tenable in respect 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the ship's rail for export. 4.2 Explanation 2 of the Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The same is reproduced below for ready reference : 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 purposes of determining the value of excisable goods. Therefore, the Central Excise Valuation Rules in accordance with the statute categorically state that 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 and leaves no room for any devious interpretation. In case of exports, the factory is not the place of removal. The RA, GOI has taken a plea in several orders that freight and insurance beyond the port of export cannot be part of the transaction value because the jurisdiction of the Central Excise Act, 1944 extends to the whole of India and not beyond. This statement is not legally tenable in respect of exports because the fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amount cannot be retained by the department. The Deputy Commissioner should comprehend that C.B.E. & C. Circular 510/6/2000-CX., dated 3-2-2000 very clearly specifies that the rebate sanctioning authority is directed to effect the payment of rebate amount shown on the ARE-1 duly authenticated by the jurisdictional excise authority and if there is any discrepancy in valuation/duty payment then the matter has to be taken up with the jurisdictional excise authority as already pointed out above. As per the C.B.E. & C. Circular, the rebate sanctioning authority was required to take up the matter with the jurisdictional Excise authority and there would be no problem encountered in compliance with the legalities. Therefore, the Board has revised the correct procedure to be adopted for carrying out the legalities and this cannot be ignored. We reiterate that the circulars are binding on the department as held by the Apex Court in case of 2004 (165) E.L.T. 257 (S.C.) in case of Commissioner of Customs, Calcutta v. Indian Oil Corporation Ltd. Therefore, compliance with the C.B.E. & C. Circular is binding on the Deputy Commissioner (Rebate) and the refund of this excess payment cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awback disbursements, the PMV is considered to determine whether the drawback is to be disbursed or not and not the FOB value of exports. The issue settled by the Apex Court in case of case law 2011 (263) E.L.T. 641 (S.C.) in case of Medley Pharmaceuticals Ltd. v. Commissioner of Central Excise and Customs, Daman wherein it is held that valuation of physician samples distributed free is to be made based on manufacturing cost plus profit or on pro rata basis. Further the Apex Court has also ruled that sale is not necessary condition for charging excise duty - Excise duty payable even in case of free supply - Section 3 of Central Excise Act, 1944. Therefore, there is no way that the rebate can be denied in respect of duty paid on physician's samples exported because sale/realization is not the criterion for the sanction of rebate. The Apex Court decision needs to be implemented. 5. Personal hearing was scheduled in these cases on 21-12-2012 at Mumbai. Shri Rajiv Gupta, Consultant along with Shri R. Narsimhan Sr. Manager appear for hearing on behalf of applicants and reiterated the grounds of revision application as well as additional submissions made in their written reply date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother in ordinary course of trade or business for cash or deferred payment or other valuable consideration." 8.3 Place of Removal has been defined under Section 4(3)(c)(i), (ii), (iii) as : (i) A factory or any other place or premises of production of manufacture of the excisable goods; (ii) A warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) A Depot, Premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. 8.4 The rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is also relevant which is reproduced below :- "Rule 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Valuation Rules, 2000. The GOI Order No. 271/2005, dated 25-7-2005 in the case of CCE, Nagpur v. M/s. Bhagirath Textiles Ltd. reported as 2006 (202) E.L.T. 147 (GOI) has also held as under :- "the exporter is not liable to pay Central Excise duty on the CIF value of the goods but the Central Excise duty is to be paid on the transaction value of the goods as prescribed under Section 4 of the Central Excise Act, 1944". It is clear from the order that in any case duty is not to be paid on the CIF value. 8.6 Hon'ble Supreme Court in its order in Civil appeal No. 7230/1999 and CA No. 1163 of 2000 in the case of M/s. Escort JCB Ltd. v. CCE, Delhi reported on 2002 (146) E.L.T. 31 (S.C.) observed (in para 13 of the said judgment) that "in view of the discussions held above in our view the Commissioner of Central Excise and CEGAT erred in drawing an inference that the ownership in the property continued to be retained by the assessee till it was delivered to the buyer for the reason that the assessee had arranged for the transport and transit insurance. Such a conclusion is not sustainable". Further, C.B.E. & C. vide its (Section 37B) order 59/1/2003-CX., dated 3-3-2003 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular dated 26-4-1996 the AR-4 value is to be determined under section 4 of Central Excise Act, 1944 and this value is relevant for the purpose of rule 12 and 13 of Central Excise Rules. The AR-4 and rule 12/13 are now replaced by ARE-1 and rule 18/19 of Central Excise Rules, 2002. It has been stipulated in the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and the C.B.E. & C. Circular No. 510/6/2000-CX., dated 3-2-2000 that rebate of whole of duty paid on all excisable goods will be granted. Here also the whole duty of excise would mean the duty payable under the provision of Central Excise Act. Any amount paid in excess of duty liability on one's own volition cannot be treated as duty. But it has to be treated simply a voluntary deposit with the Government which is required to be returned to the respondent 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. 2235 & 3358 of 2007 [2009 (235) E.L.T. 22 (P&H)], in the case of M/s. Nahar Industrial Enterprises Ltd. v. UOI has decided as under :- "Rebate/Refund - Mode of payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of transaction value with respect to CIF value/FOB value. Government has subsequently examined the issue of transaction value with respect to CIF value/FOB value in number of Revision Orders in the case of namely M/s. Pidilite Industries Ltd., GOI Order Nos. 1536-1564/2011-CX., dated 18-11-2011, M/s. Rohm & Hass (I) Pvt. Ltd., GOI Order Nos. 728-732/2011-RA-CX., M/s. Vinati Organics Ltd. GOI Order Nos. 573-604/2011-CX., dated 26-5-2011, applicants case - GOI Order Nos. 1274-1369/2011-CX., dated 30-9-2011, 1631-1708/2011-CX., dated 22-12-2011, 1008-1033/2011-CX., dated 11-8-2011, GOI Order Nos. 124-135/2012-CX., dated 14-2-2012. In all these orders a similar decision is taken. The similar decision taken in applicants case vide GOI Order Nos. 124-135/2012-CX., dated 14-2-2012 is also reproduced in para 8 above. Applicant is citing order of the year 2010 which cannot be made applicable to the present issue due to the reason stated above. Moreover, the issue is specifically dealt in the revision orders issued in the years 2011 and 2012 as mentioned above and the ratio of said orders is squarely applicable to this case. So it is wrong to contend that applicant is being given differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction value was introduced for valuation of goods under Central Excise Act and therefore said Circular issued prior to introduction of transaction value concept, cannot be strictly applied after 1-7-2000. As per para 3(b)(ii) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, the rebate sanctioning authority has to satisfy himself that rebate claim is in order before sanctioning the same. If the claim is in order he shall sanction the rebate either in whole or in part. 8.7.1 The said para 3(b)(ii) is reproduced below :- "3(b) Presentation of claim for rebate to Central Excise :- (i) ...................................................... (ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that rebate of duty paid cannot be denied on the goods supplied free as samples. The free sample has no value as they are shown free in the Shipping Bills. As per Condition 2(e) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 if the market price of the excisable goods at the time of exportation is less than amount of rebate claimed, the rebate will not be admissible since the goods are free and therefore rebate on such goods is rightly denied under Rule 18 of Central Excise Rules, read with Notification 19/2004-C.E. (N.T.), dated 6-9-2004. 9. In view of above position, the rebate sanctioned in these cases by the lower authorities is in order and Government uphold the impugned order to this extent. The adjudicating authority has however held that 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 Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section becomes payable on the expiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable. 10. It is a well settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision, there is nothing to be read in; nothing to be implied and there is no room for any intendment. (See : Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 K.B. 64 and Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax (2010) 8 SCC 739 = (2010-TIOL-66-SC-IT). 11. .................... 12. .................... 13. .................... 14. .................... 15. In view of the above analysis, our answer to the question formulated in para (1) supra is that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the appellate authority or the Court shall be deemed to be an order under sub-section (2) of Section 11B. Having observed as aforesaid the Supreme Court also held that the explanation does not effect a postponement of the date from which interest becomes payable under Section 11BB and interest under the provision would become payable if on expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Hence, it is now a settled position in law that the liability of the Revenue to pay interest under Section 11BB commences from the expiry of three months from the date of receipt of the application for refund under Section 11B(1) and not on the expiry of the said period from the date on which an order for refund is made. The submission which has been urged on behalf of the revenue is directly in the teeth of the law as laid down by the Supreme Court. The order passed by the Commissioner (Appeals) granting interest and as confirmed by the revisional authority does not hence fall for interference under Article 226 of the Constitution. The Petition is accordingly dismissed." 10.3 In view of above positio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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