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TMI Blog2013 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating authority except for a part amount out of two rebate claims on the ground that the goods cleared by the Respondent were not exported by them within six months from the date on which they were cleared for export from the factory of manufacture and thus they did not fulfil the conditions prescribed in the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. The impugned orders were examined by the Commissioner, Central Excise Commissionerate, Meerut-I and found to be not proper and legal and the grounds that; Section 4 value as shown therein does not appear to have been arrived at after deducting the freight incurred from Dehradun to Delhi as the corresponding invoices show the terms of delivery as "FOB Delhi". As such, the ARE-1 value does not appear to represent the correct value as per Section 4 of the Central Excise Act, 1944. Hence, the rebate sanctioning authority does not appear to have sanctioned the rebate correctly. The amount of duty paid on the element of freight by the Respondent is required to be rebated to them through Cenvat Credit account only. Rest is payable in cash. In this context, Board's Circular No. 203/37/96-CX., dated 26-4-1996 may be referred wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order has stated the provision of Section 4 value in respect of said ARE-1s but has not indicated the basis and proof of arriving at the Section value. The party is given undue benefit of rebate, in cash, without ascertaining the actual value as per Section 4 of the Central Excise Act, 1944 in respect of said Are-1s. 4.2 In terms of CBEC Circular No. 203/37/96-C.E., dated 26-4-1996 a value declared on AR4 (Now ARE-1) should be determined under Section 4 of the Central Excises & Salt Act, 1944 and the same is required to be mentioned on the ARE-1. However, in the present case, while arriving at the transaction value shown in the Are-1s, party has also included the transport charges from Dehradun to ICD/Airport. However, as per Rule 5 of Central Excise Valuation (Determination of Prices of Excisable Goods) Rules, 2000 where any excisable goods are sold in the aforesaid circumstances 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 place of removal up to the place of delivery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 237-C.E./Meerut-I/10, dated 26-2-2010 has allowed the appeals filed by the department and directed the respondent party to deposit the rebate allowed on such value in cash and when they deposit the rebate amount in cash, they are allowed to make simultaneous entry of equal amount in their Cenvat Credit account. 5. Show Cause Notice were issued to the Respondent under Section 35EE of Central Excise Act, 1944 to file their counter reply. No counter reply received from the respondent. 6. Personal hearing was scheduled in this case on 25-11-2011, 29-2-2012 and 18-4-2012. However Personal hearing held on 18-4-2012 was attended by Shri Pulak Raj Mullick, Advocate and Shri B.B. Gandhi, Manager on behalf of the respondent, who stated that Order-in-Appeal being legal and proper, may be upheld. 7. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 8. Government notes that rebate claims of respondent were initially sanctioned by original authority vide impugned Orders-in-Original. Department reviewed impugned Orders-in-Original and filed appeals before Commissioner (Appeals) on the ground that original authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal upto 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 purpose of determining the value of the excisable goods." 9.5 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond 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 authority's observation that it is quite possible that the parties enter into any agreement under which the exporter is obliged to deliver the goods to the Shipping Company and in such a case the place of delivery may be the place of removal is not tenable. The Commissioner (Appeals) order holding that the price contracted for sale at the time and place of removal and reflected in invoice can be accepted in a situation where the contracted price is all inclusive of freight, insurance, then such CIF price will be transaction value is contrary to provision of Section 4 of Central Excise Act and is not correct since the freight, insurance incurred beyond the place of removal/sale is to be excluded from the value as it does not form part of transaction value in terms of Rule 5 of Central Excise Valuation Rules, 2000. The GOI order No. 271/05, dated 25-7-2005 in the case of CCE, Nagpur v. M/s. Bhagirath Textiles Ltd. reported as 2006 (202) E.L.T. 147 (G.O.I.) has also held as under:- "the exporter is not liable to pay Central Excise du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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