2013 (3) TMI 598 - CGOVT - Central Excise

Denial of rebate claim - value of goods exported under claim of rebate was abnormally high as compared to same goods clear under LUT/Bond and also to their sister concern - Held that - W.e.f. 1-7-2000 the concept of transaction value was introduced for valuation of goods under Central Excise Act. Though the C.B.E. & C. Circular 203/37/96-CX. dated 26-4-1996 was issued when transaction value concept was not introduced yet the said circular clearly states that AR-4 value of excisable goods should be determined under Section 4 of Central Excise Act 1944 which is required to be mentioned on the Central Excise invoices. - ARE-1 value is to be the value of excisable goods determined under Section 4 of Central Excise Act 1944 i.e. the transaction value as defined in Section 4(3)(d) of Central Excise Act. C.B.E. & C. has further reiterated in its subsequent Circular No. 510/06/2000-CX. dated 3-2-2000 that as clarified in circular 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. 510/06/2000-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 provisions of Central Excise Act. - No infirmity in impugned order - Decided against assessee.

Summary

Issues Involved:
1. Rebate Claim Rejection
2. Abnormal Increase in Export Value
3. Determination of Transaction Value
4. Certification of Treatment and Refining Charges
5. Non-availability of Independent Sale Price
6. Refund Mode of Excess Duty Paid

Issue-wise Detailed Analysis:

1. Rebate Claim Rejection:
The applicant, M/s. Hindustan Zinc Ltd., filed a rebate claim of Rs. 1,98,03,243/- for goods exported between 11-2-2009 and 20-2-2009 under Notification No. 19/2004-C.E. (N.T.). The claim was rejected by the lower authorities on the grounds that the goods were shown as exported under LUT and not on payment of duty to claim the rebate.

2. Abnormal Increase in Export Value:
The lower authorities noted that prior to February 2009, the assessee exported lead concentrate at Rs. 22,000/- per DMT under LUT. However, during the period from 12-2-2009 to 20-2-2009, the same goods were exported at Rs. 74,000/- per DMT under a claim of rebate. This significant increase in value was perceived as an attempt to encash the accumulated Cenvat credit through overvaluation of export goods.

3. Determination of Transaction Value:
The Assistant Commissioner re-determined the transaction value at Rs. 24,200/- per DMT instead of the declared Rs. 74,000/- per DMT, allowing a cash rebate of Rs. 77,27,060/- and re-credit of Rs. 1,20,76,183/- in the Cenvat account. The Commissioner (Appeals) upheld this decision, leading to the applicant's revision application.

4. Certification of Treatment and Refining Charges:
The applicant argued that the treatment and refining charges were fixed based on a detailed technical analysis and cost analysis conducted by the foreign party. They contended that certification by a Chartered or Cost Accountant was neither possible nor required, and the charges should have been accepted based on the agreement alone.

5. Non-availability of Independent Sale Price:
The department argued that the price charged to overseas buyers could not form the basis for ascertaining the "transaction value" of export goods under Section 4 of the Central Excise Act, 1944. The adjudicating authority adopted the cost construction method under Rule 8 of the Central Excise Valuation Rules, 2000, determining the value at Rs. 24,200/- per DMT for goods transferred to the sister concern.

6. Refund Mode of Excess Duty Paid:
The excess duty paid was considered a voluntary deposit with the government, which had to be returned in the manner it was initially paid. The Hon'ble High Court of Punjab & Haryana ruled that refund in cash of higher duty paid on export products, which was not payable, is not admissible. Instead, a refund by way of credit is appropriate.

Conclusion:
The government upheld the lower authorities' decision, finding no infirmity in the impugned Order-in-Appeal. The assessable value of Rs. 24,200/- per DMT was rightly determined under Section 4(1)(b) read with Rule 8 of the Central Excise Valuation Rules, 2000, using the cost construction method. The revision application was rejected, and the excess paid amount was to be returned in the manner initially paid.