Custom, Excise & Service Tax Tribunal
Dcm Hyundai Limited vs Commissioner Of Central Excise on 8 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No.E/219/2007 [Arising out of Order-in-Appeal No.3/2007 (II) dt. 10.1.2007 passed by the Commissioner of Central Excise (Appeals), Chennai] DCM Hyundai Limited Appellant Versus Commissioner of Central Excise, Chennai-II Respondent
Appearance:
Shri J. Shankarraman, Advocate For the Appellant Shri K.P. Muralidharan, AC (AR) For the Respondent CORAM :
Honble Shri D.N. Panda, Judicial Member Hon'ble Shri Madhu Mohan Damodhar, Technical Member Date of hearing / decision : 8.12.2016 FINAL ORDER No.42435/2016 Per D.N. Panda It is the submission on behalf of the appellant that there is a statutory bar in proviso to Section 3 (1) of the Central Excise Act, 1994 to treat the goods cleared by EOU in a different status other than the goods as if it were imported under Customs Act, 1962 read with provisions of Customs Tariff Act, 1975. The value of the goods as arrived at in the country of origin shall exclude the post-import expenses for the purpose of valuation. This is the basic principle of the Customs Valuation Law.
2. The present appellant is an 100% EOU and is governed by the above said law. Therefore the post-clearance expenses incurred by the appellant in respect of the goods in question shall not be includible in the assessable value.
3. Revenue, on the other hand, denies the above proposition.
4. Heard both sides and perused the record. Perusal of the proviso to Section 3 (1) of Central Excise Act, 1944 and most particularly sub-clause (i) (i) under that proviso has a fiction to treat the excisable goods manufactured by EOU and cleared to a DTA as if such goods were imported into India. The statutory provision reads as under :
SECTION 3. Duties specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied. (1) There shall be levied and collected in such manner as may be prescribed, - .... ..... ......
Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured, -
(ii) by a hundred per cent export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975).
The statutory provision as read above, throws light that the goods cleared by EOU shall be treated as if the goods were imported and the rule of valuation of the imported goods shall apply. Taking into consideration the valuation rule of the Customs law, which makes it clear that the post-clearance expenses shall not form part of the assessable value, in the present case the expenses of such cost sought to be included in the assessable value is unwarranted. More particularly, the deductive method of Customs Valuation Rules, 1988 says that cost of transportation, insurance and associated cost incurred within India shall not form part of the assessable value. Accordingly, appeal is allowed.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (D.N.PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
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