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TMI Blog2013 (10) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 - ocean freight as mentioned in the shipping bill cannot form part of value determined under Section 4(1)(a) in view of above discussed statutory provision. Original authority has rightly allowed the rebate claim of the duty paid on value of exported goods as determined under Section 4 of Central Excise Act, 1944. Government, therefore, sets aside the impugned Orders-in-Appeal and restores the impugned Order-in-Original. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ty element shown in ARE-1 once the jurisdictional Range officer had certified to be correct." "Lower authority had failed to appreciate that the rebate is to be sanctioned on transaction value and also failed to note that the rebate is claimed by merchant exporter who do not maintain Cenvat credit account. The transaction value of the goods between the manufacturer and merchant exporter is the value which is charged by the manufacturer for the said goods. Thus the rebate to be sanctioned on such transaction value. FOB value is the value which is charged by the merchant exporter from the ultimate buyer and this value is not the transaction value for the purpose of Central Excise duty. Therefore sanction of rebate by the lower authority on FOB value is not correct, Central Board of Excise & Customs vide Circular No. 510/06/2000-CX, dated 3-2-2000 had certified that the rebate sanctioning authority should not examine the correctness of assessment but should examine only the admissibility of rebate of duty paid on the export goods covered by a claim. Further allowing of re-credit in Cenvat account is meaningless in case of merchant exporter who does not maintain any Cenvat credit acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Transaction value is defined under Section 4(3)(d) of the Act which is as under : Section 4(3)(d) : "transaction 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 other taxes, if any, actually paid or actually payable on such goods. Similarly, the order in the case of CCE, Surat-I v. M/s. Rivaa Exports Ltd., Surat passed by the Joint Secretary (RA) vide Nos. 864-869/10-CX, dated 26-5-2010 has held that…….Rebate in cash is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess duty paid on the portion of value exceeding the value determined under Section 4, was allowed to be re-credited in the Cenvat credit account. In appeal, Commissioner (Appeals) allowed the cash rebate of said re-credit amount also. Now, department has challenged the said Orders-in-Appeal on the grounds stated above. 8. Government notes that in these cases the duty was paid on exported goods at CIF value as is evident from the value declared on the shipping bill and commercial invoice. In the shipping bill, FOB value and freight are shown separately. The ARE-1 value is equal to FOB value and freight as shown in shipping bill. The commercial invoice raised by respondent allows shows that goods are sold on C&F basis. In view the statutory valuation provisions, the original authority the Assistant Commissioner, Central Excise of jurisdictional Central Excise Division has assessed the value under Section 4 as value declared on ARE-1 minus the ocean freight incurred beyond the port of export. 9. Government observes that for proper understanding and consideration issue involved the relevant statutory provisions for determination of value of excisable goods are required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 9.5 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 observes that once the place of removal is decided within the geographical limit of the country, it cannot be beyond the port of loading of the export goods. Under such circumstances, the place of removal is the port of export where sale takes place. The appellate au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssable 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 ownership or the point of sale of the goods." 9.7 Government observes that the respondent in their counter reply relied upon the C.B.E. & C. Circular 203/37/96-CX, dated 26-4-1996 and Circular No. 510/06/2000-CX, dated 3-2-2000. In this regard, the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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