TaxTMI 
TaxTMI 
2010 (3) TMI 970
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....ter Nos. ACD/Rebate/T/357/2005-06 dated 9-9-2005 & ACD/T/2005-06 dated 20-7-2005 respectively against goods cleared for export vide ARE-I Nos. T-371/2005-06 dated 27-7-2005 and 206/2005-06 dated 21-6-2005 respectively. As per rebate applications filed by the appellants, the goods were exported under Shipping Bill Nos. 5754395 dated 10-8-2005 and 5694904 dated 30-6-2005 respectively. Both the rebate claims were processed and the jurisdictional Asstt. Commissioner has sanctioned the rebate claims. During the departmental review, it was found that the export invoices have remarks 'Free samples" and the respective Shipping Bills have also remarks 'No foreign Exchange is involved" and it was clear that the exports had been made without any reali....
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....-appeal, the applicant has filed this revision application on the following grounds: 3.1 The goods in question (free trade samples) have been exported by the applicant as per the provisions of Rule 18 of the Central Excise Rules, 2002. Nowhere under these rules, or the notifications issued thereunder, there is any condition that in respect of goods exported, the consideration should necessarily be received from the customer. The order-in-appeal has been passed merely on assumptions and deserves to be set aside for this reason also. 3.2 It may be observed that there is no condition under notification that the exporter must receive foreign exchange as a consideration for export of goods to be eligible for rebate claim under Rule 18. Acc....
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....rting the goods it is necessary for the applicant to mention the "commercial value" of the goods in the export documents. Since the applicant have supplied these goods free as sample to their foreign customer, they have rightly mentioned their "commercial value" as NIL. Commercial value is an agreed transaction value for consideration of sale of goods between the two parties. Since the samples were supplied free the 'Commercial value" has been rightly mentioned as NIL. However, by no stretch of imagination, it can be said that "commercial value and market value" of the goods at the time of exportation was not known. In fact the applicant have paid excise duty on the said goods based on the comparable market value of the said goods even thou....
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.... of the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. In other words, entire matter was revenue neutral and the rebate claim allowed to the applicant cannot be recovered for the reason mentioned hereinabove. The impugned order-in-appeal deserves to be set aside for this reason also. 3.5 Without prejudice, the applicant further wish to submit that need for supply of free samples to foreign buyer is clearly recognized under the Foreign Trade Policy issued by the Director General of Foreign Trade has a provision for export of free samples to overseas buyers. Para 2.26 of the said policy clearly provides that the export of bona fide trade and technical samples are freely exportable without any limit. Accordingly, in view of these pro....
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....e/commercial value of the goods is obviously nil because the applicant have supplied these goods as free samples to their customers but the fact that the goods in question have a "market value" of Rs. 26 Lacs cannot be disputed. In other words, had the applicant decided to sell the goods either in the domestic market or otherwise these goods were capable of fetching the market value/price not less than Rs. 26,10,866/-. In view of these facts it cannot be said that the "market value" in terms of conditions 2(e) of the Notification No. 19/2004-C.E. (N.T.), dated 6-9- 2004 was NIL or lower than the amount of rebate claimed. Accordingly the applicants were rightfully entitled and eligible for rebate of duty paid on goods exported as per the ....