The Customs, Excise & Service Tax Appellate Tribunal Chandigarh allowed the exporter’s claim for rebate on Tools and Dies charges, set aside Central Excise Duty Demand
Facts
The appellant is engaged in the manufacture of Rough Forgings, Tractor Parts and MV Parts and had cleared the goods for export both under LUT on without payment of duty as well as on payment of duty and claimed rebate (refund) of duty paid. During audit it was noticed that the appellant was recovering tool and die charges from various parties on sale invoices issued to them without charging central excise duty.
A show cause notice was issued to the appellant on the ground that the amount was being charged in addition to the sale amount recovered from the parties and in view of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000, tool and dies development charges form the part of the assessable value as additional consideration and are thus liable to Central Excise duty. It was stated in the show cause notice that the appellant had realized tool and development charges of Rs. 74,01,143.00 (Rs. 74,01,143.00 (Exports) + Rs. 25,000.00 (Domestic)) from various buyers on sale invoices issued to them on which central excise duty of Rs. 9,96,674.00 was not paid and hence the same was demanded along with interest and proposal for imposition of penalty.
Submissions
Counsel appearing for the appellant submitted that the entire charges received on account of export of goods and the appellant is entitled to claim rebate of duty since there is no dispute of export of goods, foreign remittance and also submission of proof of exports.
Decision
The two member bench of S. S. Garg Member (Judicial) And P. Anjani Kumar Member (Technical) found that the entire charges received by the appellant on account of tools and dies which were used in the production were on account of export of goods and there is no dispute regarding the export of goods, foreign remittance and proof of export.
It was further found that the distinction made by the Commissioner (Appeals) that the export under LUT is different from export under rebate is against the export policy because the exported goods are not subject to central excise duty and the entire situation is revenue neutral.
The Tribunal held that the impugned order is not sustainable in law and set-aside the same by allowing the appeal.
Case title: M/s R. B. Forging (P) Ltd. (Unit-I) v/s CCE, Chandigarh
Citation: Excise Appeal No. 58116 Of 2013
