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TMI Blog2014 (12) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is arrived at by including commission and excluding freight) in absence of any substantive counter argument of applicant department. Accordingly, the rebate is admissible on such transaction value. On perusal of sample AREs-1 No.614 dated 11.7.12 and ARE-1 N6.757 dated 29.7.12 and relevant shipping bill No.1157499 dated 1.8.12 and 1142621 dated 2.8.12, Government observes that goods covered vide said two sample- AREs-1 have been cleared under physical supervision of central excise authorities and ultimately exported along with goods covered vide 18 other AREs-1, vide above mentioned two shipping bills, as evident from endorsement of custom authorities on part B of said ARE-1. There is no finding of original authority regarding correlation between excise documents and export documents except ambiguity in weight, which has been explained by the respondent as mentioned in para (11) above. Under such circumstances, keeping in mind whole fact of the case, Government finds force in argument of the respondent regarding ambiguity in net weight/gross weight. As such export of duty paid goods stands established. Under such circumstances, Government finds that rebate is admissible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment of duty and filed two rebate claims. While scrutinizing their two above stated rebate claims, the Assistant Commissioner found some discrepancies in both the rebate claims. Therefore, he issued two different SCNs both dated 04.01.2013 for clarification and rejection of rebate claims, if no satisfactory clarification submitted. In the first claim of rebate of ₹ 65,66,993/-, the adjudicating authority found that the invoice value declared in shipping bill No.1157499/03/08/2012 dated 31.08.2012 was., ₹ 6,46,71,000.35 or US 1175836.37 and FOB value of goods was ₹ 5,35,83,937.00 or US $ 9,74,253.3818. The amount of freight was US$ 2,01,582.97 and the commission given was US .$ 34,267.18 in respect of goods exported and he found that the conversion rate from US$ to Rupees was declared as ₹ 55.00/ US$ The adjudicating authority discussed that FOB value at that time of export should come out afte deduction of Freight/Insurance/Commission etc. from invoice value. The adjudicating authority found that FOB value should be US$ 11,75,836.37- (US$ 2,01,582.97 + US$ 34,267.18) = US$ 9,39,986.22 and in INR after conversion it comes to ₹ 5,16,99,242.10 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment has filed this revision application under Section 35 EE of Central Excise Act, 1944 before Central Government on. the following grounds: 4.1 The Appellate Authority failed to appreciate Rule-5 of Central Excise Valuation Rules, 2000 where any excisable goods are sold in circumstances specified in clause (a) of sub-section (1) of Section 4 of the Central Excise Act and Rule 18 of the Central Excise Rules 2002: In respect of Order-in-Original No.CE/KDH-I/DC-09(R)/12-13 the invoice value as declared by the claimant in the Shipping Bill bearing No.1 157499/03/08/2012 dated 31.08.12 was ₹ 64671000.35 or $117836.37 and FOB value was ₹ 53583937/- or $974253.38. The amount paid for Freight was $201582.97 and Commission given was $34267.18 in respect of the material export according the above mentioned Shipping Bill and conversion rate from $ to Rupees was declared at ₹ 55/- per $. FOB value at the time of export should come out after, deduction of Freight/Insurance/Commission etc. from the Invoice value. Accordingly to arrive at the FOB value, Freight(Insurance/Commission etc. are required to be excluded from the Invoice value as declared in the Shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biguities in quantities, net and gross weight etc. In the ARE-1s the claimant had mentioned Net weight and gross weight against their commodities meant for export whereas it was seen that the commodities i.e. pipes are cleared in loose condition. So no question of gross weight arises and hence, remains a mis-statement. 4.4 The Appellate Authority overlooked the matter in respect of non-submission of Bank Realisation Certificate alongwith the rebate claim from which the actual transaction value could have been ascertained and thereby the actual rebate they are entitled to, could be determined. 4.5 The Appellate Authority remains silent regarding the point mentioned' in the Order-in-Original No.CE/KDH-I/DC-10(R)/12-13 that the claimant had declared the goods were manufactured after availing the CENVAT credit facility and exported under claim of rebate whereas in the ARE-1 No.805 dated 04.08.12, 8 Boxes of lubricant and rubber gasket were exported without declaring the assessable value. 5. A show cause notice was issued to the respondent under Section 35 EE of Central Excise Act 1944 to file their counter reply. The respondents vide their written submission dated 26.2.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (RE-2008)/2004-09 dated 6 January 2009 conspicuously provides that commission is not required to be excluded in arriving at the FOB value of exports and the appellate authority after taking cognizance of the said circular has held that commission was not required to be deducted in arriving at the FOB value for payment of excise duty. The revisional authority will appreciate that FOB value cannot be given a different connotation for the purposes of the Foreign Trade Policy vis-a-vis the excise law as otherwise an exporter would be required to declared multiple FOB values in the self-same shipping bills. It is submitted that the department has not cited any plausible reason what so ever as to how an inconsistent approach should be adopted for arriving at the FOB value for the purposes of payment of excise duty vis-a-vis the foreign trade policy. 5.2. The departmental authorities have alleged that the appellate authority failed to appreciate Rule 5 of the Valuation Rules to bolster their contention that commission should have been excluded in arriving at the FOB value for the purposes of payment of excise duty. In this regard, we would like to submit that the said Rule 5 only seeks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allegation is with a clear ulterior motive of denying the rebate claim for technical and procedural infirmities contrary to the settled position of law that the core aspect in determination of the rebate claims is the fact of manufacture, payment of duty thereon and its subsequent export. If this fundamental requirement is met, other attendant procedural requirements can be condoned. Reference in this regard is invited to the following decisions of the revisional authority: i. Shreyas Packaging 2013(297)ELT476 ii. Barot Exports 2006(203)ELT321 5.5 The allegation that the appellate authority remained silent on the matter regarding the ambiguity in quantity is not only superfluous but factually incorrect in as much as there was no dispute what so ever with respect to the quantity of pipes reflected in the ARE-1s vis-a-vis shipping bill and the excise invoice. It is an undisputed position that pipes in the instant case were exported in loose conditions and the total quantities of pipes so exported were 1575 pcs duly reflected in the 20 ARE-is comprised in the two shipping bills. That the quantity reflected in the ARE-1 is in agreement with the shipping bills can be verifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neutralising only the customs duty incidence on inputs and was available irrespective of whether any cenvat facility was available or otherwise. The appellate authority accepted this contention in view of Para 6 of Notification No.68 while holding that there was no irregularity in the simultaneous availment of excise rebate claim on the finished goods and the drawback of the customs component. That simultaneous availment of rebate claim for neutralising the, excise duty incidence and AIR of duty drawback for neutralising the customs duty incidence is Permissible also stands duly acknowledged by the Central Board of Excise and Customs ('CBEC`) vide para (d), of the Circular bearing, No.35128 0. 5.8 Further, as regards non-declaration of assessable value of 8 Boxes Lubricant andRubber Gasket in ARE I No.805 dated 4 August 2012, we wish to reiterate that as the said lubricant and rubber gasket are accessories and the value thereof stood included in the value of pipes under export, no more value was realisable for the same and hence no value was separately declared thereof. Therefore, we are at a complete loss to understand as to how the instant allegation can have any bearing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has stated that their value on which they discharged duty, is FOB value which is inclusive of commission. This fact has not been controverted by department. Now, next question remains to be examined is that whether commission paid can be included in transaction value or not? 9.2 Government finds that para 4(3)(d) of the Central Excise Act 1944 reads as under: Transactions value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on' behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including but not limited to, any amount charged for or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and oilier taxes, if any, actually paid or actually payable on such goods. From the above provision it can be inferred that commission paid is required to be included in transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal up to the place of delivery of such excisable goods. Explanation 1. - Cost of transportation 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 purposes of determining the value of the excisable goods On bare perusal of above rule, Government finds that said rule only provides for exclusion of cost of transportation in case of goods sold for delivery at a place other than the place of removal. Government notes that there is no mention whatsoever regarding exclusion of commission from FOB value to arrive at transaction value. As such; this- contentiorG of theapplicant_departraeatis C rary to legal position and hence not tenable. 9.5 In view of above, Government observes that there are specific provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riented schemes. A merely technical interpretation of procedures etc. is to be best avoided, if the substantive fact of export having been made is not in doubt,' a liberal interpretation is to be given in case of any technical lapse. In Suksha International Vs. UOI 1993 (39) ELT 503 (SC), the Hon'ble Supreme Court has observed that an interpretation unduly restricting the scope of beneficial provision is to be avoided so that it may not take away with one hand what the policy gives with the other. In the Union of India Vs. A V Narasimhalu 1983 ELT 1534 (SC), the Apex Court also observed that the administrative authorities should instead of relying on technicalities, act in a manner consistent with the broader concept of justice. Similar observation was made by the Apex Court in the Formica India Vs. Collector of Central Excise 1995 (77) ELT 51(SC) in observing that once a view is taken that the party would have been entitled to the benefit of the notification had they met with the requirement of the concerned rule, the proper course was to permit them to do so rather than denying to them the benefit on the technical grounds that the time when they could have done so, had el ..... X X X X Extracts X X X X X X X X Extracts X X X X
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