India is a country where the law can
be differently interpreted because the law is made in that flexible manner.
Therefore a high court can issue a well reasoned order & the Supreme court
can reverse it in a well reasoned order. Both the decisions are hailed as
remarkable albeit at different points of time. Not only this, the decision of
the Supreme Court is subject to review. All this is very fine but then this
state of affairs is the strength & pillar of systemic corruption & rent
seeking at the lower rung. Those who take care of the authorities get five star
treatment & favourable decision but those who work in a legally oriented
manner are forced to bear the brunt of the loopholes & even forget their
legitimate entitlements.
This is a series pertaining to the
sanction of rebate on exports. In this write up we provide that how even the
highest authority i.e. the Revisionary Authority, Government of India can
change stand even without battling an eyelid & continue to do so even after
the issue is raised in the appeal that the authorities are bound by the said
order as the same has not been challenged or reversed by any higher authorities.
However, all such submissions fall on the deaf ears. If such shameful &
disgusting state of affairs exist in the implementation of the settled law then
is it wrong to say that India is a banana republic.
The Govt. of
India’s Orders in Revision Nos. 1685.10-CX dated 03.11.2010 and 1805/10-CX
dated 24.12.2010 in the cases of M/s. SPL Industries, Faridabad and M/s.
Sterlite Industries (India) Ltd, Tuticorin respectively are cited before the
authorities. Therefore going against these orders without citing the
differences is not legally tenable. These orders are binding & need to be
followed until the same are set aside/reversed by any higher authority.
Therefore, citation in respect of Furnace Fabrica order in Appeal No.
SRK/345/Bel/2008 dtd. 4.6.2008 is of no help to the department.
In case of
Sterlite Industries Ltd., Tuticorn, the Revisionary Authority has upheld the
order passed by the H’onble CESTAT passed in the case of Sterlite Industries
Ltd., Tuticorn & the H’onble CESTAT ruled in the operative part of the
order in paragraph 2 of the Final order No.
1431/2008 dtd 8.12.08 as under:
Quote:
The lower authority ordered recovery
of rebate allowed to the extent of Rs. 4,50,13,457/- on the basis that the appellants
had claimed rebate of duty paid on the CIF value instead of FOB value of each
of the consignment covered. We find that an exporter is entitled to rebate of
the entire duty of excise paid on a consignment of excisable goods on its
export. There is no dispute that the appellants paid the impugned amount as
part of the duty of excise on consignments exported and covered by ARE-1s. A
claim for the said amount cannot be denied on the ground that rebate is
admissible only on the duty on the FOB value and not on the CIF value as long
as the same represents the transaction value. In the instant case, there is no
dispute that the entire amount of Rs. 16,10,23,430/- including the impugned
amount of Rs. 4,50,13,457/- under supplementary invoices had been paid by the
assessee as excise duty on the transaction value of the goods.
Unquote:
Thus the H’onble CESTAT has affirmed
that freight & Insurance are part of the transaction value & the same
is accepted by the Revisionary Authority. Under any circumstances, it cannot be
the case of the department that different interpretation of the law prevails
depending upon the magnitude of the duty.
Similarly, in case of SPL Industries,
Govt. of
India’s Order in Revision No. 1685.10-CX dated 03.11.2010, the following is concluded:
A.The order
passed in case of Shri Bhagirathi Textiles Ltd., 2006 (2002) ELT 147 (GOI) has
been discussed at length & it is concluded that case has no bearing in
cases where the foreign exchange is realized in full as per the declaration
made by the exporter. Therefore citation of Bhagirathi Textiles by the
appellant is of no value.
B. The
operative part of the order reads as:
Quote:
Government
observes that that the respondent has claimed that they were having the
contract with the buyer which included the sale price of the goods plus freight
& Insurance charges, so it is transaction value of the exported goods under
S 4 of the Central Excise Act, 1944 and they are eligible for total rebate in
cash. The foreign remittances as per BRC s is equal to the ARE-1 value.
Commissioner (Appeal) have examined their contention in detail and rightly held
that duty paid in this case on contractual prices/transaction value is to be
rebated.
Unquote:
Thus once
again it is crystal clear that freight & insurance is included in the
transaction cost & rebate cannot be denied on that. In our case, full
realization of export value has taken place therefore there cannot be any
reduction in the duty amount paid.
The two
orders are not set aside. The orders are passed by the RA, GOI itself, still
they are ignored. Is it a case of selective amnesia? There is a different law
for the rich & the influential corporate & a different law for the
small & medium enterprises. Are the authorities beyond the law & they
can behave in such whimsical manner & get away with it. However, when law
does not come to the rescue, cheating & abuse of authority is resorted to
& decisions are giving by ignoring the submissions placed on record. This
can only happen in India because there is absolutely no fear of whatsoever
nature because the authorities are sure that nobody will pay any heed to the
complaints of such misdemeanour & ever take action against them. Thus there
is binding legal precedent but no implementation of it, thus reducing India to
a banana republic.
This is the fourth part of the story. However,
the story of the abuse of authority does not end here. Further lampooning of
the system & abuse by the authorities will follow in the next write up.
Till then Good bye.
rajiv.pec@gmail.com
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