Tribunal affirms duty payment for exported watches, rejects Revenue's claim. Exemption not applicable to exports.

The Tribunal upheld the appellants' duty payment at 16% for exported watches, rejecting the Revenue's claim for a differential amount. It was determined that duty assessment under Section 4 was appropriate, not under the exemption notification for watches below Rs. 500. The Tribunal clarified that the exemption did not extend to exported goods due to unaffixed retail prices. The appeals were allowed, affirming the correctness of duty payment and the exemption's inapplicability to exports.

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Issues:
1. Duty rate payable on exported watches.
2. Applicability of exemption notification.
3. Assessment of duty for exported goods.

Analysis:
1. The appellants, engaged in manufacturing quartz watches, paid duty at 16% on watches exported by them, though the effective rate for watches with a retail price below Rs. 500/- was 8%. The Revenue sought to recover the differential amount. The appellant claimed that duty should be assessed under Section 4 for exports, not under the exemption notification. The ld. Advocate argued that since export prices are not affixed with retail prices, the exemption does not apply. The SDR contended that the price being below Rs. 500/- necessitates the 8% duty. The Tribunal found the appellants discharged their duty correctly at 16% and upheld the rebate claim.

2. The Tribunal analyzed Exemption Notification No. 10/2003-C.E., which applies to watches with a retail price not exceeding Rs. 500/- per piece. While export prices may be below Rs. 500/-, the Tribunal noted that the exemption does not extend to goods sold in other countries. As retail prices cannot be affixed to export goods, the exemption notification does not apply to exported goods. The Tribunal emphasized that the Standard of Weight and Measures Act is also inapplicable to goods exported from India due to the lack of control over sale prices. The decision highlighted the irrelevance of encashing Cenvat credit, focusing on the legal validity of the Revenue's contention, which was deemed incorrect.

3. The Tribunal concluded that the appellants correctly paid duty at 16% for the exported watches, and the rebate claim was rightfully sanctioned. Consequently, both appeals by the appellants were allowed with consequential relief, emphasizing the legal correctness of the duty payment and the inapplicability of the exemption notification to exported goods.

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