TaxTMI 
TaxTMI 
2013 (10) TMI 1300
X X X X Extracts X X X X
X X X X Extracts X X X X
....s-in-Original containing ARE-1 are as under : OIO No. ARE-1 No. ARE-1 Value Shipping Bill Value 76 to 77 76, 86 & 93/10-11 7233202 7032050 78 to 80 98 to 100/10-11 8899750 8396510 81 to 82 101 to 102/10-11 6916410 6181049 107 01 & 06/11-12 7948810 7780365 The Assistant Commissioner sanctioned the above rebate claims by the Orders-in-Original Nos. 76 to 77/AC/Rural/Bvr/Rebate/2011-12, 78 to 80/AC/Rural/Bvr/Rebate/2011-12, 81 to 82/AC/Rural/Bvr/Rebate/2011-12 and 107/AC/Rural/Bvr/Rebate/2011-12 in which they have ordered to sanction the rebate claims with restriction to be paid in cash on the basis of FOB value of the goods to the respondent and ordered to re-credit the differential amount of assessable value and FOB value. As the correct assessable value as per Section 4 of the Central Excise Act, 1944 is the transaction value which always excludes overseas freight and insurance. The excise duty is found paid and claimed on C&F Value, which is against the Section 4 of the Act read with Valuation Rules. 2.1 Being aggrieved with the [said order they] preferred an appeal with the Commissioner (Appeals) on the ground that the impugned orders are not in accorda....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ost removal expenses like freight and insurance which does not form part of the transaction value. The assessee is not liable to pay duty on CIF value of the goods. The duty to be paid on the transaction value of goods determined under Section 4 of the Central Excise Act, 1944. The Board vide Circular No. 203/37/96-CX, dated 26-4-1996 has certified that :- "it is the assessable value determined under Section 4 of the Central Excises & Salt Act, which is required to be mentioned on AR 4 (now ARE-1) and the corresponding invoice issued under Rule 52A. This value is relevant for the purpose of Rule 12 and Rule 13 of Central Excise Rules, 1944. FOB value is relevant for Customs purposes and other schemes like drawback, export under DEEC, etc.". Therefore, the value of ARE-1 shall be determined under Section 4 of the CEA, 1944 and said value determined under the provision of Section 4 is the transaction value which excludes post-removal expenses like overseas freight and insurance and this value is relevant for purpose of Rules 12 and 13 of the erstwhile Central Excise Rules, 1944. Now Rule 18 has been introduced in new Central Excise Rules, 2002 in place of old Rules 12 & 13. Moreove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in cash, the same is recoverable. 3.2 Thus the provision of Section 4(1)(a) and 4(3)(d) of Central Excise Act, 1944 read with definition of "transaction value", the value in terms of Section 4 ibid, shall be the amount that the buyer of exported goods is liable to pay. In the instant case, the buyer of the goods to be exported had paid an amount of duty on CIF value shown in ARE-1 which is contrary to the provision of Section 4 of Central Excise Act, 1944. The correct assessable value as per Section 4 of the Act is the transaction value which always excludes overseas freight and insurance. 3.3 The above discussion makes it unambiguously clear that the respondent was not eligible to rebate in excess of duty paid than the transactional value determined under Section 4 of CEA, 1944. 4. A show cause notice was issued to the respondent under Section 35EE of Central Excise Act, 1944 to file their counter reply. Respondent in his written counter reply dated 15-2-2012 reiterated his submission which were made before Commissioner (Appeals). 5. Personal hearing scheduled in this case on 25-9-2013 was attended by Shri Maimesh K. Oza, Advocate on behalf of the responden....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... price is the sole consideration for the sale, be the transaction value. (b) In other case, including the cases where the goods are not sold be the value determined in such manner as may be prescribed. 9.2 Word 'Sale' has been defined in Section 2(h) of the Central Excise Act, 1944, which reads as follows : "'Sale' and 'Purchase' with their grammatical variations and cognnate expression, mean any transfer of the possession of goods by one person on another in ordinary course of trade or business for cash or deferred payment or other valuable consideration." 9.3 Place of Removal has been defined under Section 4(3)(c)(i), (ii), (iii) as : (i) A factory or any other place or premises of production of manufacture of the excisable goods; (ii) A warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) A Depot, Premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. 9.4 The Rule 5 of Central Excise Valuation (Deter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der 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. 271/2005, 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 duty on the CIF value of the goods but the Central Excise duty is to be paid on the transaction value of the goods as prescribed under Section 4 of the Central Excise Act, 1944". It is clear from the order that in any case duty is not to be paid on the CIF value. 9.6 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcular clearly states that AR4 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. Even now the 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 AR4 value is to be determined under Section 4 of Central Excise Act, 1944 and this value is relevant for the purpose of Rules 12 and 13 of Central Excise Rules. The AR4 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. Any amount paid in excess of duty liability on one's own volition cannot be tr....