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TMI Blog2015 (3) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) on the ground that the rebate claims to the tune of ₹ 55661/- and ₹ 1975/- were wrongly sanctioned. It was contended in the appeals that the value declared in the ARE-1 was more than the FOB value declared in the Shipping Bills. The value declared in the ARE-1 was more, which was not the correct transaction value and the duty amount paid on the said excess value was not admissible as rebate. The transaction value as per Section 4 of Central Excise Act, 1944 is the value at which goods are sold but does not include freight and insurance. The Commercial invoice value is the value at which goods are sold. Therefore, the value after deducting freight and insurance from commercial invoice value (which is equal to FOB value) should be the transaction value for the purpose of Section 4 of Central Excise Act, 1944. The difference in the value of the goods shown in the ARE-1 and the FOB value shown in, the invoice is arrived after reducing the Freight and Insurance charges (if any) from the Commercial value. The excess amount paid on ARE-1 value over and above FOB value is-not the duty of Central Excise but it is to be, treated as Excess payment . The Rebate in terms of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar also says that if the-rebate sanctioning authority has reasons to believe that duty has been paid in excess than what should have been paid, he shall inform, after granting the rebate, the jurisdictional Assistant/Deputy Commissioner. The language of the CBEC circular is unambiguous leaves no room for interpretation. The said circular was brought to the notice of the Commissioner (Appeals) the same is simply recorded in the order but no findings are given or why the said circular need not be followed by the field formation! The adjudicating authorities cannot circumvent The issues raised in this manner, which are against the department. 3.1.3 The circular issued vide F.No.M.F.(D.R.) F.No.354/81/2000-TRU, dated 30.6.2000 clearly states that However, exclusion of cost of transportation is allowed only if the assessee has shown them separately in the invoice and the exclusion is permissible only for the actual cost so charged from his buyers. Therefore exclusion of the freight is conditional the freight cannot be excluded if the condition is not met as per the law there cannot be any distinction permissible in terms of type of freight as the law does not provide for it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimant on the wrong premise that the difference between FOB value of exports given in the S/B the assessable value given in the ARE-1 is the freight insurance element. More so, when the transaction value can include any charges, 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 therefore the definition is very wide to include several other charges such as storage, sample testing etc. The freight Insurance are related to the sale cannot be excluded if not shown separately. 3.1.5 Please note that FOB value given in the S/b is only for the purpose of collection of export statistics as the same is estimated value. therefore, this S/B value cannot be treated as FOB value for the purpose of assessment of duty. If the FOB value of exports given in the S/B is true value of the transaction then all the export incentives will be disbursed on this value but that is not the case. Therefore the FOB value in the S/b is only indicative cannot be relied upon as transaction value in terms of the C.Ex.Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties do riot intend to deliver the goods across the ships rail, the FCA term should be used. The .other definitions of C F the CIF are not reproduced for the sake of brevity but the sellers responsibility to deliver the goods under the ships rail remains as it is under these categories of shipments also. Therefore, the undisputable fact, remains that under FOB/C F/CIF, the responsibility rests on the seller to deliver the goods cleared for export at the named port of shipment. Even in case of Air shipment the term to be used is FCA, which means that the goods are to be delivered to the carrier at the named place for shipment. 3.2 Grounds in Revision Application No. 198/30/12-RA 198/31/12-RA (OIA No.US/414-416/RGD/11 dated 17.11.11): 3.2.1 The Commissioner (Appeals), by setting aside the impugned Os-I-A, by following orders No.926-991/11-Cx dated 25.7.2011 in case of M/s Chemagis India Pvt. Ltd. of the Joint Secretary to the Government of India and relying upon Hon'ble Supreme Court judgment in the case of Superintendent (Tech-I) C.Ex. Vs. Pratap Rai reported in 1978(2) ELT J613(SC) has de-facto remanded the case to the original authority: However, the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate claims of ₹ 55661/- and ₹ 1975/- only Commissioner (Appeals) while allowing department's appeals has also set aside the entire impugned orders-in-original. Now, the applicant parties as well as department have filed these revision applications on grounds mentioned in para (3) above. 7. Government observes that as per para 3(b) (ii) of Notification No 19/04- CE(NT) dated 6.09.04, 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. The said para 3(b)(II) is reproduced below :- 3(6) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale, be the transaction value (b) In other case, including the cases where the goods are not sold be the value determined In such manner as may be prescribed 8.2 The word Yale has been defined in S#Cti017 2(h) of the Central Excise Act, 1944, which reads as follows: 'Sale' and 'Purchase' with their grammatical variations and cognnate expression, mean any transfer of the possession of goods by one person on another in ordinary course of trade of business for cash or deferred payment of 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. Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance incurred beyond the place of removal/sale is to be excluded from the value as it does not form part transaction value in terms of Rule 5 of Central Excise Valuation rules, 2000. The GOI order No. 271/05 dated 25.7.05 is the case of CCE Nagpur Vs. M/s Bhagirath Textiles Ltd. reported as 2006 (202) ELT 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 central Excise duty is to be pad 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. Vs CCE Delhi reorted on 2002 (146) ELT 31 (SC) observed (in para 13 the said judgement) 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 transi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further reiterated in its subsequent circular No.510/06/2000-Cx dated 3.2.2000 that as clarifier/ in circular dated 26.4.96 the AR4 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 AR4 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.19/04- CE(NT) dated 6.9.04 and the CBEC circular No.510/06/2000-0( 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 be 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, in the case of M/s. Nahar Industrial Enterprises Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction 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 Rohm Hass (I) Pvt. Ltd., GOI order No. 728-732/11-RA-Cx, M/s Vinati Organics Ltd. GOI order No. 573-604/11-Cx dated 26.5.11, and number of other orders. In all these orders a similar decision is taken. The similar decision taken in applicants case vide GOI Order No. 926-991/2011-Cx date 25.07.2011 has also been reproduced in para 8 above. Applicant is citing order of 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 year 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 different treatment. 8.5 For Applicability of the cited precedents, Government is of the opinion which is guided by the observations of Hon'ble Supreme Court in para 10 of judgement in case of Escorts Ltd. vs. CCE Delhi-II 2004 (173) ELT 113 (SC) which inter alia stipulates pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. This contention merits consideration and is required to be considered by the original authority after doing necessary verifications from records. The rebate claims initially sanctioned by original authority excluding the disputed amounts of ₹ 55661/-1 and ₹ 1975/- as stated above are in order as the same was not challenged at all. Commissioner (Appeals) has erred in setting aside the sanction of entire rebate claims. As such, the sanction of impugried 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 ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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