TMI Blog2022 (4) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... proper officer is not defined in this Rule, since the return is to be filed with the Superintendent of Central Excise, such officer can only be understood to be the proper officer empowered to scrutinise the returns for correctness. Any Central Excise officer may exercise the powers and discharge the duties conferred or imposed under this Act on any other Central Excise Officer who is subordinate to him [Section 12E]. Evidently, the Rules have not conferred any powers on the officers of DGCEI to either assess the duty or to scrutinize the returns for their correctness. Therefore, the officers of DGCEI have no power either to assess the duty or to scrutinize the self assessment by the assessee. If on scrutiny, the assessment by the assessee is found to be incorrect and the assessee does not agree with the officer‟s assessment, there are two options. One is for the department to file an appeal with the Commissioner (Appeals). It has been held by the Constitution Bench of Supreme Court disposing of a batch of matters involving Customs, Excise and Service Tax in ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] that all asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the judicial precedents but also Board‟s Circular. This is beyond the powers conferred even on the Superintendent of Central Excise who has the mandate to scrutinise returns, let alone officers of DGCEI who have no jurisdiction even to scrutinise the Central Excise Returns for correctness. Appeal dismissed. - E/ 51558/2017, E/51052, 51053, 51054, 51059, 51096/2018 - Final Order Nos. 50338-50343 /2022 - Dated:- 18-4-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Sanjay Kumar Singh, Authorised Representative for the Appellant/Department Ms. Surabhi Sinha, Advocate for the Respondent. ORDER We have heard Shri Paresh M. Dave, learned counsel for the M/s Blue Whale Enterprises India Private Limited in Appeal No. 51558 of 2017, and Ms. Surabhi Sinha, learned counsel for M/s Unicorn Industries in Appeal No. 51502 of 2018 for Shri Jignesh Rajendra Shah in Appeal No. 51053 of 2018 for Shri Vedprakash Wadhwani in Appeal No. 51054 of 2018 for Shri Dhanjibhai Mangukiya in Appeal No. 51059 of 2018 and for Shri Venkat Raghunath Chari in Appeal No. 51096 of 2018. We have also heard Shri Sanjay Kumar Singh, learned authorised Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it as per the exemption notification. Investigations in this case were initiated and completed by the DGCEI who, after investigation, concluded that the average cost of production of pan masala by Unicorn was ₹ 160 per kg. After adding 50% as other expenses and profit, the assessable value of pan masala was re-determined at ₹ 240 per kg. However, Unicorn issued invoices and sold pan masala at the rate of ₹ 1,700 per kg to Blue Whale and paid excess central excise duty (which was to be refunded) and also pass on excess CENVAT credit to Blue Whale. 4. The SCN proposes to re-assess the duty paid by Unicorn thereby lowering the duty liability of Unicorn and thereby the CENVAT credit admissible to Blue Whale. The Commissioner has identified and decided the falling two issues in the case: (i) Whether the excess CENVAT credit of ₹ 2,81,51,136/- said to be availed by Blue Whale due to higher valuation of pan masala at the end of supplier was admissible to them or not; (ii) Whether the value of the good cleared for export by Blue Whale needs to be re-determined at ₹ 324 per kg instead of ₹ 1784 per kg as declared by them. 5. On the first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 7. On the second issue of proposed re-determination of the value of the goods exported by the appellant to ₹ 324 per kg from ₹ 1,784 per kg, he held that the statutory provisions do not allow re-determination of the value of exported good declared by the assessee when there is no record of case of over valuation booked by the customs authorities who cleared the goods. He relied upon Sterlite Industries India Ltd. vs. Commissioner of Customs [ 2009 (236) ELT 143 (Tri-Chennai) ]. 8. Revenue is aggrieved by the impugned order and filed this appeal on the following grounds: (i) The show cause notice issued by DGCEI in this case clearly mentioned that Unicorn had overvalued the goods and paid Central Excise Duty intentionally at higher value as they are entitled to the refund of the duty paid to pass on excess credit to Blue Whale. The said over-valuation was done with the malafide intention and in collusion with Blue Whale who are exporting the goods manufactured out of goods supplied by Unicorn. The relationship between the Unicorn and Blue Whale resulted in their collusion in defrauding the Government Revenue. (ii) While dropping the demand, Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] before the High Court of Gujarat which were disposed of by the High Court setting aside the orders of passed by the Joint Secretary and ordering the rebate to be sanctioned. Thereafter, the rebate was sanctioned but no interest was paid to M/s Kamakshi. Hence Special Civil Application No. 19916 of 2016 was filed by them before the High Court of Gujarat which was decided by the High Court [ 2017 (351) ELT 102 (Guj) ] ordering sanction of interest also. 12. We have considered the submissions on both sides and perused the records. 13. At the outset, we find that show cause notice issued by the DGCEI seeks to deny credit under Rule 14 read with Section 11A of central Excise Act and also seeks to re-determine the assessable value of the goods exported by Blue Whale. Rule 14 of the Central Excise Rules provides for issue of notice to recover irregularly availed CENVAT credit, and the provisions of Section 11A apply mutatis mutandis to such recovery. 14. The first question to be addressed is whether the officers of DGCEI have the power to re-determine the assessable value. The powers of Central Excise officers have been defined in Section 12E of the Central Excise Act whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and when required by such officer . ****** 15. Thus, the assessment of duty which includes determining the classification of the goods, their valuation, the exemption notifications that may apply and determining the duty payable is the responsibility of the assessee itself as per Rule 3. The assessee is also required to file monthly returns with the Superintendent of the Central Excise [Rule 12 (1)] which can be scrutinised by the proper officer for correctness [Rule 12(3)]. While the proper officer is not defined in this Rule, since the return is to be filed with the Superintendent of Central Excise, such officer can only be understood to be the proper officer empowered to scrutinise the returns for correctness. Any Central Excise officer may exercise the powers and discharge the duties conferred or imposed under this Act on any other Central Excise Officer who is subordinate to him [Section 12E]. Evidently, the Rules have not conferred any powers on the officers of DGCEI to either assess the duty or to scrutinize the returns for their correctness. Therefore, the officers of DGCEI have no power either to assess the duty or to scrutinize the self assessment by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. In the case before the High Court, goods were exported under claim of drawback and the drawback was available as a percentage of the free on board (FOB) value of the exported goods. DRI received intelligence after their export that the goods were over-valued to claim higher drawback and accordingly a SCN was issued seeking to reduce the value of the goods already exported and thereby recover the excess drawback. The High Court held as follows: 15. Hon‟ble Supreme Court in ITC v. CCE (supra) has made it clear that self-assessment or assessment made by proper officer under Section 17 read with Section 2(2) of 1962 Act is an assessment so an importer is bound to file appeal under Section 128 for its modification if he wants to claim refund under Section 27 of the 1962 Act because Section 27 is sort of execution and while deciding refund application an Assistant Commissioner cannot modify assessment made at the time of import. Thus, it is evident that refund claims which were earlier entertained on admitted/conceded mistakes would not be maintainable without being corrected in appellate proceedings. 16. We on examination of the scheme of the 1962 Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent is neither vested with power of re-assessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of export goods‟ as defined under Section 2(19) of 1962 Act, thus Respondent cannot invoke Rules 6 8 of Valuation Rules, 2007. In view of judgment of Hon‟ble Supreme Court in the case of ITC v. CCE (supra), we find that shipping bill either self-assessed or assessed by proper officer is amenable to appeal by both sides. Respondent by way of show cause notice under Rule 16 of the Drawback Rules, 1995 cannot modify assessed shipping bill. 18. Therefore, we hold that Respondent in terms of Rule 16 of Drawback Rules, 1995 as well Valuation Rules, 2007 has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods. In the present case, goods in question stood exported thus impugned order is not sustainable in view of our aforestated findings as well. 19. Accordingly, present writ petitions are allowed on all the counts, namely, limitation, absence of mechanism and lack of power to frame re-assessment of goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported. Once the goods are exported the export value is available in the export documents including the shipping bills. Once shipping bill is assessed and goods are permitted to be exported, the only remedy available to the Revenue to seek modification of the shipping bill, is by filing an appeal before the Commissioner (Appeals) within time. The Commissioner has, in the impugned order correctly observed that no re-determination of the value of the goods exported has been done. In a nutshell, while Central Excise Act and the Customs Act provide for assessment based on transaction values subject to some exceptions, the SCN has been issued by DGCEI replacing the transaction value with values which it considers fair and proper assuming not only the power of deciding what is a fair assessable value but also seeking to deny CENVAT credit available to the buyer by re-determining the value at the end of the supplier contrary to not only to the judicial precedents but also Board‟s Circular. This is beyond the powers conferred even on the Superintendent of Central Excise who has the mandate to scrutinise returns, let alone officers of DGCEI who have no jurisdiction even to scrutinis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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