54-55 - Central Excise, Ahmedabad

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Stay Appl.No. 23 & 24/2014-15
3alt &raft 4si1 Order-In-Appeal Nos. AHM - EXCUS - 001 - APP - 054 - 055 - 2014 - 15
ft-4rw Date : 22.09.2014
41 3114
4 drtrYff
Date of Issue
iii-31 6-63)1V
all cm (314i-V) brdT 4re/7
Passed by Shri. Anil Kumar, Commissioner (Appeal-V)
Assist./Deputy Commissioner, Th'If44 uuti STI, Div. I.,A1 bad - I sid
it
311-48T
178/AC DIV.I/Reb./2013 - 14: 28.03.2014 & 179/ AC Div.I/Reb./2013 - 14
28.03.2014 71
Ii
i
Arising out of Order-in-Original Nos.178/AC Div.l/Reb./2013 - 14 dated 28.03.2014 & 179/
AC Div.I/Reb./2013 - 14 dated 28.03.2014 issued by
Asstt. Commr., Gen_ Excise,Div.1,Ahmedabad-I.
affiltWgt ITT 9'7fq Itui Name & Address of the Appellant / Respondent
ASHIMA DYECOT LTD.
Ahmedabad
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Any person a aggrieved by this Order-In-Appeal may file an appeal or revision application, as the
one may be against such order, to the appropriate authority in the following way :
4
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Revision application to Government of India :
ZTRT
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A revision application lies to the Under Secretary, to the Govt. of India, Revision Application Unit
(i)
Ministry of Finance, Department of Revenue, 4 l" Floor, Jeevan Deep Building, Parliament Street, New
Delhi - 110 001 under Section 35EE of the CEA 1944 in respect of the following case, governed by first
proviso to sub-section (1) of Section-35 ibid :
'fief MR firer
(ii)
1
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In case of any loss of goods where the loss occur in transit from a factory to a warehouse or to
(ii)
another factory or from one warehouse to another during the course of processing of the goods in a
warehouse or in storage whether in a factory or in a warehouse.
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In case of rebate of duty of excise on goods exported to any country or territory outside
India of on excisable material used in the manufacture of the goods which are exported
to any country or territory outside India.
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(c)
In case of goods exported outside India export to Nepal or Bhutan, without payment of
duty.
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(d) Credit of any duty allowed to be utilized towards payment of excise duty on final
products under the provisions of this Act or the Rules made there under and such order
is passed by the Commissioner (Appeals) on or after, the date appointed under Sec.109
of the Finance (No.2) Act, 1998.
MM1811 ‘30-11 ,1 811-1 (3110) fl
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The above application shall be made in duplicate in Form No. EA-8 as specified under
Rule, 9 of Central Excise (Appeals) Rules, 2001 within 3 months from the date on which
the order sought to be appealed against is communicated and shall be accompanied by
two copies each of the 010 and Order-In-Appeal. It should also be accompanied by a
copy of TR-6 Challan evidencing payment of prescribed fee as prescribed under Section
35-EE of CEA, 1944, under Major Head of Account.
(2)
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The revision application shall be accompanied by a fee of Rs.200/- where the amount
involved is Rupees One Lac or less and Rs.1,000/- where the amount involved is more
than Rupees One Lac.
12r4r
q4 MMTM18- 31-nt1 eri uR
2141-RAppeal to Custom, Excise, & Service Tax Appellate Tribunal.
(1)
*la ‘3011q-1
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311`81eMZPM 1944
MRT 35- 41- /35-1 M
Under Section 35B/ 35E of CEA, 1944 an appeal lies to :(co)
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3. MR. rn.
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(a)
the special bench of Custom, Excise & Service Tax Appellate Tribunal of West Block
No.2, R.K. Puram, New Delhi-1 in all matters relating to classification valuation and.
NO
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44-r 31-M8M8 Si 31-dT8T
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thM1M SIIMI 88f cbtqt3 11 M, MAT* -18t 31 -81T81W11
8-380016.
(b)
(2)
To the west regional bench of Customs, Excise & Service Tax Appellate Tribunal
(CESTAT) at 0-20, New Metal Hospital Compound, Meghani Nagar, Ahmedabad : 380
016. in case of appeals other than as mentioned in para-2(I) (a) above.
*-4M1 ■M1-118-1 8tech (37 C) IMMITIMA, 2001 th
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8T
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Mrty mf1 aaTT1 MIFMI t 8 1611 -Mm9q 10000/- thti 0
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The appeal to the Appellate Tribunal shall be filed in quadruplicate in form EA-3 as
prescribed under Rule 6 of Central Excise(Appeal) Rules, 2001 and shall be
accompanied against (one which at least should be accompanied by a fee of Rs.1,000/-,
Rs.5,000/- and Rs.10,000/- where amount of duty / penalty / demand / refund is upto 5
Lac, 5 Lac to 50 Lac and above 50 Lac respectively in the form of crossed bank draft in
favour of Asstt. Registar of a branch of any nominate public sector bank of the place
where the bench of any nominate public sector bank of the place where the bench of the
Tribunal is situated.
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In case of the order covers a number of order-in-Original, fee for each 0.1.0. should be
paid in the aforesaid manner not withstanding the fact that the one appeal to the
Appellant Tribunal or the one application to the Central Govt. As the case may be, is
filled to avoid scriptoria work if excising Rs. 1 lacs fee of Rs.100/- for each.
(4)
wryId4 x
a1ted-681 1970 Ettl- E7E-t6fa- Th‘l 31-tft- -1 d5 31edd fttfiRt itt &TIN 3E61 311-336- 651
3-1813
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r,6.50 h‘t 4T -614164
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One copy of application or O.I.O. as the case may be, and the order of the adjournment
authority shall a court fee stamp of Rs.6.50 paise as prescribed under scheduled-I item
of the court fee Act, 1975 as amended.
3E6 Ttalltd
*41-4 3311E9 -6j-
(5)
-ftEllEur me-1 8 Prison a9 att tr nut aln
Ee14y6 airEA331 EST (416fEth) lThE3761, 1982E ftftt ti
Attention in invited to the rules covering these and other related matter contended in the
Customs, Excise & Service Tax Appellate Tribunal (Procedure) Rules, 1982.
(6)
RIFF
-sjElIthe 31111—A1a •- fli 1- 4)
(f4-Rtz),
srth artro'r
trizO
briar A* (Demand) 64 33 (Penalty) chi to% tr,4 ' 54:rr shier 30E454 t lgjsii , 31*W-enEt "EIT 10 '3/3
SVl
1994)
((Section 35 F of the Central Excise Act, 1944, Section 83 & Section 86 of the Finance Act,
rdEff, 61T$1731717 4, i G4 *Fiat (Duty Demanded) -
4 3FET3 4013W 311-4" trai
(1)
(Section)th
(ii)
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For an appeal to be filed before the CESTAT, 10% of the Duty & Penalty confirmed by
the Appellate Commissioner would have to be pre-deposited, provided that the predeposit amount shall not exceed Rs.10 Crores. It may be noted that the pre-deposit is a
mandatory condition for filing appeal before CESTAT. (Section 35 C (2A) and 35 F of the
Central Excise Act, 1944, Section 83 & Section 86 of the Finance Act, 1994)
Under Central Excise and Service Tax, "Duty demanded" shall include:
(i)
amount determined under Section 11 D;
(ii)
amount of erroneous Cenvat Credit taken;
(iii)
amount payable under Rule 6 of the Cenvat Credit Rules.
3rr
TI-41-1
6ET NAT t ukl areF wrfel*Tur t Twat- 016T ery artrar sty irt zug Fa -ariteg1 a1
Fia t Wu- am tra to scare - trr ath we 4.1of kug %mita fl as
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In view of above, an appeal against this order shall lie before the Tribunal on payment of
10% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where
penalty alone is in dispute."
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
4
ORDER-IN-APPEAL
The present appeals dated 09.06.2014 alongwith the stay applications have been filed
by M/s Ashima Dyecot Ltd., Texcellence Complex, Khokhara-Mehmadabad, Ahmedabad
(herein after referred to as the appellant') against 010 Nos. as detailed in the Table below
(hereinafter referred to as the ''impugned orders") passed by the Assistant Commissioner,
Central Excise, Div.1 Ahmedabad-((hereinafter referred to as the "adjudicating
authority").The appellant are engaged in the manufacturing of Cotton Fabrics & Man Made
Fabrics falling under Chapter No. 52 & 55 of the Central Excise Tariff Act, 1985.
Sr No 010 Nos. & Date
Demand confirmed
1178/AC/Div.I/Reb/13-14 28.03.1435,66,936/i
:179/AC/Div.I/Reb/13-14 28.03.14175,97,052/-
2.
The appellant has exported Cotton bleached and Finished Fabrics of Ch. 52 so
manufactured in their registered factory premises on payment of Central Excise duty at the
rate specified in the Notification No. 29/2004-CE dtd. 09-07-2004 an filed Rebate claims
in terms of Rule18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-
CE (NT) dtd. 06-09-2004. The appellant had been issued following Show Cause Notices
mentioned at SI. No. 1 to 17 for recovery of erroneous sanctioned rebate claims total
amounting to Rs. 75, 97,052/- under Section 11A of the Central Excise Act, 1944 and Show
Cause Notices at SI. No. 18 & 19 as to why rebate claims of Rs.1, 31, 095/- should not be
rejected under Section 11B (1) of Central Excise Act, 1944. Vide various 010s as mentioned
against each SCNs, it has been ordered to recover total amount of erroneous rebate of Rs.
75, 97, 052/- in respect of SCN at SI. No. 1 to 17 and rebate claims of Rs. 1, 31, 095/- has
been rejected in respect of SCN at SI. No. 18 & 19.
Sr No
Show Cause Notice No
Da
I
F/00-151/Reb/2009 29 03 11
2
V/10-152/Re4V20.0 9 29 03 11
3
‘210-153/Reb12009 29 03 11
4
1 VI10-154)Reb/2009 29 03 11
5
42 10-1551Reb12009
'
VI10-1571ReN2009
I
8
3
4,95,4284
4.98 838/-
1
4,24.054-
!
4,70.5774
112/AGM& 11-12 28 11 1
113IACARebn 1-12
107/A2/RW11-12
114/ACIRe5/11-12
494,8431-
115/AC/Reb/11-12
\in o-ienew2aos 29 03 11
4 '93' 9961'
116/ACiReh/11-12 28 11 11
VII 0-164/Reb.200.
4,95.0738
II MC.)1264,11-12
4.225554
118/AC/Reb/11-12
29 03 11
V20-168Re412009
2903.11
11
4.98,838)-
424,0541-
4.70.577/-
28 11 11
4 43 ' 9961
28 11 11
4.22.5651-
28 11
4.95.5734
290 . 11
4420-1594Reb12009
4,95,428/-
2811.11
290.11
11
13
11 ITAC/Reb/11-12 28 11 11
4.83 122,2
28.1111
290311
12
109/Ac/Rebi11-12 28.11 11
4.90,371.1-
V110-165,94412009
.e mend confirms
2811.11
29031/
V210 159:Feb/2009
1-1-
010 Na 8. Date
110/ACIReb211-12 213.11.11
29 03 11
_
9
4 93,847I•
29 03 11
4/110-156)Re122209
6
r
, 7
mount (Rs
11412.GRebi1 1-12
495,6734
281111
2,99,581)-
120.410Ret2 -12
28.11 11
2.99 5814
Appeal Nos. V.2(52)/38,39/Ahd-l/201 4-15
& Stay Appl.Nos. 23,24 /2014-15
5
4
V/10.01117e192010
2 76.1924
12133C/Reb11-12
3 1666985
122/AC/Red II-12
4,31.3184
123/AC/Re6/1112
70 n11
29 03 11
5
3/110-121Re0/2010
6
V/10-14/Re6e2010
2011.11
29 03 11
V/10-15 to 17 &
4,31.318/-
201111
11
29 03 11
464,8761-
103/ACARebll 1-12
4.64,876/-
2011.11
11
33IRed2010
29 03 11
IS
19
WI0-09/Re8d 1-12
140/AC/Reel 1.12
030011
11
16-12-11
V/10-10.Rebil 1-12
44,836/-
141/AC4Re9/11-12
44,036/-
16.12-11
16.12 11
TOTAL
3.
86.2598
77, 28. 1471.
Against the above mentioned 010s passed by the Assistant Commissioner, Central
Excise, Division-I, Ahmedabad, the appellant had preferred appeals before the Commissioner
(Appeals- V), Central Excise, Ahmedabad. The said appeals filed by the appellant were rejected
vide CIA No. 23 to 41/ 2012 (Ahd-1) CE/MM/Commr (A)/ Ahd dtd. 26-03-2012 by
Commissioner(Appeal-V) by upholding the 010s confirming demand of erroneous
sanctioned rebate claims of Rs. 75, 97, 052/- and also upholding two 010s whereby rebate
claims of Rs. 1, 31, 095/- had been rejected.
4.
Being aggrieved with above mentioned CIA, the appellant filed Revision Application
under Section 35 EE of Central Excise Act, 1944 before the Joint Secretary to the Government of
India who has issued an Order No. 331-349/2013-Cx dtd. 02-04-2013 remanding these cases
back to original authority to decide the issue afresh keeping in mind observations made by
R.A. and by considering case laws cited by the appellant in the matter.
5.
Revision Authority has observed in his above order dtd. 02-04-2013 as under:
(a) The lower authority viz. Assistant Commissioner observed while demanding erroneous
sanctioned rebate claims that the assessee having not availed cenvat credit, were
compulsorily required to avail complete exemption of duty under Notification No. 30/2004-CE
dtd. 09-7-2004 and hence the export of goods after payment of duty under Notification No.
29/2004-CE dated 09-07-2004 was not correct. In this regard, it has been observed by
Government that Notification No. 29/2004-CE dtd. 09-07-2004 grants partial exemption to goods
manufactured and duty is chargeable @ 4% or 8% and Notification No. 30/2004-CE dtd. 09-072004 grants full exemption from payment of duty subject to condition that no cenvat credit is
taken on the inputs consumed in the manufacture of final products. The assessee could avail
both the aforesaid Notifications simultaneously as clarified by CBEC vide Circular No.
795/28/2004-CX dtd. 28-07-2004 subject to maintenance of records separately for goods in
respect of which benefit of Notification No. 29/2004-CE dtd. 09-07-2004 and benefit of
Notification No. 30/2004-CE dtd. 09-07-2004 is availed. Further, CBEC issued a Circular No.
845/3/2006-CX dtd. 01-02-2007 for simultaneous availment of both the Notification and clarified
that non-availment of credit on inputs is a precondition for full exemption under Notification No.
30/2004-CE dtd. 09-07-2004 means if manufacturers avail input cenvat credit, they would be
ineligible for full exemption under Notification No. 30/2004-CE dtd. 09-07-2004. However,
CBEC further allowed availment of proportionate credit on the inputs utilized in the manufacture
of goods cleared on payment of duty under Notification No. 29/2004-CE dtd. 09-07-2004.
Accordingly, matter is very crystal clear that option is with the manufacturer to avail or not to C\a
t-i
Appeal Nos. V.2(52)/38,39/Ahd-1/2014-15
& Stay Appl.Nos. 23,24 /2014-15
6
avail cenvat credit on the inputs as the availment of cenvat credit is a beneficial scheme and
there s nothing in the Notification No. 29/2004-CE dtd. 09-07-2004 for the manufacturer to
compulsorily avail cenvat credit on the inputs. There is bar only on for availment of cenvat
credit under Notification No. 30/2004-CE. dtd. 09-07-2004. Thus, it has been observed by
Government that Assistant Commissioner's conclusion was not correct in holding that the
assessee having not availed cenvat credit will have to opt for exemption under Notification
No. 30/2004-CE dtd. 09-07-2004 and cannot pay duty under Notification No. 29/2004-CE dtd.
09-07-2004. Further, it has been observed that assessee has cited GOI Revision Orders in
the case of Nahar Ind. Enterprises Ltd. 2012 (283) ELT 444 (G01) and Auro Spirming Mills
2012 (276) ELT 134 (G01) which were not considered by Assistant Commissioner while
deciding said SCNs at all.
(b) The lower authority viz. Assistant Commissioner observed while demanding erroneous
sanctioned rebate claims that the assessee procured raw materials duty free under
Advance Licence Scheme, DEEC Scheme and exported goods were manufactured from
such duty free inputs. Onaccount of absence of duty paid nature of raw materials, assessee
was not entitled to cenvat credit. Further, lower authority observed that assessee started to
avail full exemption under Notification No. 30/2004-CE dtd. 09-07-2004 from 16-01-2006
and therefore credit available in their account as on 16-01-2006 would lapse in terms of
Rule 11 (3) of Cenvat Credit Rules, 2004. Thus, it was concluded by lower authority that
lapsed amount of credit had been utilized for discharge of duty under Notification No. 29/2004CE dtd. 09-07-2004 on exported. goods with a view to encash already lapsed cenvat credit
on account of availment of full exemption under Notification No. 30/2004-CE dtd. 09-07-
2004. Lower authority also observed. that assessee could not pay duty from their Deemed
Cenvat Credit Account once they opted for full exemption as Deemed Cenvat Credit Scheme
was withdrawn from 01-04-2003. In this regard, it was observed by the Government in this
Revision Order that said assessee submitted that they reversed an unutilized balance of
Deemed credit of Rs. 28, 43, 967/- on 01-.04-2003 and thereafter credit was eamed by
procurement of various raw materials on duty paying documents which was lying unutilized.
Further, it has been observed that lower authority has not given clear finding on the aspect
whether Cenvat credit lying in balance was availed on the basis of proper duty paying
documents that is required to be verified from relevant records to arrive at proper & just
conclusion. Government has also observed in said Order that assessee availed cenvat
credit during 01-09-2004 to 16-01-2006 on raw materials and cleared their goods on
payment of duty for home consumption and cleared their goods under bond for export that
resulted into accumulation of cenvat credit due to fact that accrued credit was not claimed
for refund under Rule 5 of Cenvat Credit Rules, 2004. The assessee opted for full exemption
with effect from 17-01-2006 under Notification No. 30/2004-CE dtd. 09-07-2004 and
reversed proportionate credit on goods lying in balance. Even after reversal of proportionate
amount on goods lying in factory on 16-01-2006, assessee was having balance in their
Cenvat account. These factual details were not controverted by lower authority. Regarding
lapse of unutilized balance of cenvat credit in terms of Rule 11(3) of Cenvat Credit Rules,
2004, assessee has relied upon judgements of Hon'ble Karnataka High Court's Order dtd. 1104-2001 on CEA No. 109 of 2009 in case of CCE, Bangalore-II Vs. Gokaldas Intimate Wear
reported in 2011 9270) ELT 351 (Kar.), CESTAT order in case of CCE Bangalore-II Vs. Mother
Appeal Nos. V.2(52)/38,39/Ahd-I/2014 - 15
& Stay Appl.Nos. 23,24 /2014 15
-
7
Diary 2009 (245) ELT 413 (T- Bang) and CCE Chandigarh Vs. Saboo Alloys Pvt. Ltd. 2008
(228) ELT 422 (T-Delhi) and contended that Rule 11 (3) of Cenvat Credit Rules, 2004
inserted w.e.f. 01-03-2007 vide Notification No. 10/07-CE (NT) dtd. 01-03-2007 and
therefore its provision cannot be made applicable to impugned cenvat credit balance as on 1601-2006. It has been clearly held in above judgments that said Rule 11 (3) came into effect
from 01-03-2007 and effect of the same is prospective. In this regard, Government has
observed that above judgments were not considered by lower authority while passing orders
that require to be considered before coming to any conclusion.
6.
I find that in another case, the appellant were issued three Show Cause Notices by
the Assistant Commissioner, Central Excise, Division-I, Ahmedabad-I as to why rebate
claims should not be rejected under Section 11B of the Central Excise Act, 1944 on the
grounds (i) that the credit utilized for the payment of duty on export goods was not available to
the manufacturer under Rule.11 of Cenvat Credit Rules, 2004 and (ii) that no justification of
their claims on the basis of deemed credit under Notification No. 6/2006-CE (NT) dtd 01-032002.
Show Cause Notice F.NO. & Date
mount
of
Sr. No.
rebate
3,82,502/-
1
V/10-134/Reb/09 dtd. 10-03-2010
2
V/10-144 to 146/Reb/09 dtd. 16-03 74,11,568/-
3
r-do--
4,81,975/-
;-do--
4,86,755/-
1V/10-123-130/Reb/09 dtd.
5-02-20104,98,291/4,99,489/-
i
k-do--
'4,81,159/-
--do--
3,25,197/-
TOTAL
35, 66, 936/-
The above SCNs were decided by the Assistant Commissioner, Central Excise, Division-1,
Ahmedabad-I vide below mentioned eight Order-In-Originals sanctioning the rebate claims to the
appellant.
Order-in-Original No. & Date
Sr. No.
Amount
rebate
1
05/AC/Reb/10 dtd. 06-04-2010
2
13/AC/Reb/1 0 dtd. 30-04-2010
568/-
3
14/AC/Reb/1 0 dtd. 30-04-2010
,81,975/-
3,82,502/-
15/AC/Reb/10 dtd. 30-04-2010
r1,86,755/-
99/AC/Reb/09 dtd. 24-03-2010
4,98,291/-
6
100/AC/Reb/09 dtd. 24-03-2010
,99,489/-
7
101/AC/Reb/09 dtd. 24-03-2010
81,159/-
102/AC/Reb/09 dtd. 30-03-2010
3,25.197/-
TOTAL
35, 66, 936/-
7.
Being aggrieved with these orders of adjudicating authority, revenue(department) filed
appeal with Commissioner (Appeal-IV), Ahmedabad. Commissioner(Appeal)
Appeal Nos. V.2(52)/38,39/Ahd-1/2014-15
& Stay Appl.Nos. 23,24 /2014-15
Department's appeal & set aside Orders of adjudicating authority vide 01A No. 296 to 303/
2010 (Ahd-1) CE/ MM/Ahd dtd. 27-08-2010. The appellant filed the Revision application against
Commissioner (Appeal), Ahmedabad's above order dtd. 27-08-2010 before the Joint
Secretary (Revision Application), Department of Revenue, New Delhi on 13-10-2010 under
Section 35EE of the Central Excise Act, 1944
8.
Revision Authority has decided the matter vide their Order No. 3-10/2012-Cx dtd.
06-01-2012 and has remanded the case matter back to original adjudicating authority, for
being a basic fact finding jurisdictional authority, to verify and confirm the claims of applicant
and then to decide the case matter as per law after affording reasonable opportunity of hearing
as per the principles of natural justice.While remanding the matter back, R.A. has observed as
follows:
That the said Orders-in-Original were reviewed by the jurisdictional Commissioner and
relevant appeals were filed by the department alleging that the appellant had cleared goods
for export after debiting duty from the balance lying in their account accrued due to deemed
credit which was availed by the appellant under Notification No. 6/2002- CE (NT) dated
01-03-2002 and which since rescinded w.e.f. 31-03-2003 and the appellant was not entitled
to such remnants of deemed credit balances.Commissioner (Appeal) reconsidered the
whole case matter and held all the observations and conclusions of the impugned 010 as
illegal on all counts and the same were set aside in total without verification of basic records
in order to ascertain whether any duty as was discharged was made out of available
balances of 'deemed credit or 'actual cenvat credit account. That after actual verification
of relevant records/registers, the original adjudicating authority has mentioned in his
discussions & finding portion of impugned 010 that the doubt of availment of any 'deemed
credit got dispelled. With the above observations R.A. has remanded the matter back to original
adjudicating authority for verification of basic records/ documents and claim of the appellant
that they have never had or utilized any deemed credit in clearance of impugned exported
goods and then to decide the case matter as per law after affording reasonable opportunity
of hearing as per principal of natural justice.
9.
The Joint Secretary to the Government of India vide Order Nos.3-10/2-012-CX dtd.
6.1.2012 and 331-349/2013-Cx dtd. 02-04-2013 has remanded these cases back to original
authority to decide the issue afresh keeping in mind observations made by R.A. and by
considering case laws cited by the appellant in the matter. The adjudicating authority vide the
impugned orders as detailed in the Table above has decided the matter afresh . Being
aggrieved by the impugned orders, present appeals dated 09.06.2014 and 09.06.2014 has
been filed by the appellant on the following grounds :
9.1 That the adjudicating authority has failed
and has clearly erred in failing to follow
authority as well as the Tribunal and various
to consider various submissions made
the direct judgment of the revisional
High courts in their favour and thus the
impugned order may be set aside.
9.2
That they had exported similargoods on payment of duty under not4f. bon
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
9
No.29/2004. Cash rebate against the said export was allowed to them vide order dated
23.6.2008 passed by the Commissioner (appeals). The aforesaid order is also not
challenged before ; higher judicial forum and hence the same has become final.
That the department cannot reopen the issue if the order of the Commissioner (appeals) is
accepted by the department. Hence, the order holding contrary view is bad in law and
requires to be quashed and set aside.
9.3
That
once
the
credit
is
availed
and
in
line
of
statute book, the same is indefeasible. It is a settled law that if credit is availed, it is for the
department to take proceeding under the Central Excise Act and under the CENVAT
Rules in order to render credit erroneous. Unless such proceedings are availed, credit
obtained cannot be defeated. In the present case, not only is the credit availed, but the
same has been utilized. At no stage, are any proceedings taken under the provisions of
the Central Excise Act or CENVAT Rules to the effect that credit is wrongly availed or
utilized. Unless such proceedings are taken, right to utilize such credit becomes
indefeasible. They were therefore, clearly entitled to avail such credit. Now, what cannot
be done directly cannot also be done indirectly. Once proceedings are not taken by the
department to outrage credit, such credit cannot be defeated indirectly by not allowing
rebate claim.
9.4
That it is not for the rebate granting authority to go into validity of the credit at
all. Once credit exists on the statute books and it is availed, it is not open to the rebate
granting authority to decide whether credit was correctly availed or not. That the entire
exercise is ex-facie without jurisdiction. Even if the rebate granting authority is correct
that CENVAT credit lapsed, it was for the department to issue show cause notice for
lapsing of credit and raising demand on the goods cleared on payment of duty on
utilization of credit. It cannot be for the rebate granting authority to consider all these
aspects at the stage of granting rebate. That the aforesaid aspects which go to the root of
the matter have not been considered by the adjudicating authority.
9.5 That the issue stands settled by the judgment of the revisional authority itself in
the case of Nehar Industries reported at 2012 (283) ELT 444 and Auro Spinning Mills 2012
(276) ELT 134.
9.6 That the adjudicating authority could not have failed to follow all these judgments
which are directly on the point. The grounds for distinguishing the same in the
impugned order are ex-facie erroneous and are merely a fasad. The issue in the
cases of Nehar Industries and Auro Spinning Mills was precisely the very issue which
arises in the present case and hence, it cannot be said that the said judgments do not
cover the present case.
9.7 That Gujarat High court in the case of Arvind Mills has taken a similar view in
special civil application No. 10887 of 2012. That all relevant aspects have
been considered even on facts as per para 7 of the impugned order. That there is no
question of deemed credit being utilized as was originally the case of the510150Rireq.
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
10
It is also found that credit which was availed for the period 10.9.2004 to 16.1.2006 and
that the same was availed on the basis of proper duty paying documents. The
adjudicating authority ought to have appreciated that the credit in question is earned
credit. It is an admitted fact that as stated in the very same para, proportionate credit on
inputs lying in the goods in stock or inputs in stock as on 17.1.2006 has already been
reversed. In other words, the credit which is now lying is credit which is actually
earned by them and could not be utilized because substantial amount of goods was being
exported.
9.8
That credit lying unutilized in their account is an accrued right as held by the Hon'ble
Supreme court in the case of Eicher Motors Limited v. Union of India, reported at 1999
(106) ELT 3 and 1999 (112) ELT 353 reported in Dai !chi Karkaria Limited that right cannot
be taken away by any subsequent legislation. The full contention that the credit
should lapse under rule 11 is misconceived and also against the settled principles of
law laid down by the Hon'ble Supreme court in the aforesaid two cases. Rule 11 does
not say that the credit lying unutilized shall be lapsed if the manufacturer clears any
goods under exemption. It is submitted that as per rule 11, the credit shall lapse
only if a manufacturer avails benefit of value based exemption notification or the goods are
absolutely exempted. Hence, it is incorrect to hold that the credit lying unutilized in the
appellant's account shall lapse on account of opting for benefit of exemption notification No.
30/2004 and thus the order is bad on this count also and requires to be set aside.
9.9 That the decision of the Tribunal in the case of M/s Raymond limited reported at 2011
(273) ELT 582 in which, under similar circumstances, cash refund was allowed by the
Tribunal. That if cash refund in case of unutilized CENVAT credit is permissible, then
under no circumstance, it can be held that the credit lying unutilzed shall lapse. That once
they have paid
for such duty on inputs which are already utilized, credit in this regard
becomes indefeasible and an accrued right. There is no question of such credit right
being defeated even as per the provision of rule 11
as is sought to be done. The basis of
rejection of rebate claim is that the utilization of cenvat of excise duty was wrong. The
Cenvat should have lapsed under rule 11 as the appellant had opted for non-availment of
Cenvat as prescribed under notification No. 30/2004 and accordingly the rebate is held as
inadmissible. That for sanction rebate claim, the department has to verify the roof of
exports like ARE - 1, shipping bill EP copy, Bill of lading and bank realization certificate. The
adjudicating authority at the time of sanction rebate claim as verified the aforesaid
aspect. Once proofs of exports are submitted and the claim of rebate is allowed, the
authority cannot recover the same on the ground of payment of duty from wrong
account. While deciding the present case, the lower authority has totally ignored the
aforesaid provision of rules. The claim of rebate is sanctioned under rule 18 of Central
Excise Rules. That once the export of goods is established, the rebate cannot be denied on
the ground that availment of credit was wrong. Credit availment and utilization arat
governed by Cenvat Credit Rules. In the present case, when there is no dispUte1
regarding exports of goods, the rebate of the exported goods cannot be rejected relying on
Cenvat Credit Rules which does not apply to the facts of the present case. Hence, the
317
2±31..f.
Appeal Nos. V.2(52)/38,39/AhcH/2014-15
& Stay Appl.Nos. 23,24 /2014-15
11
order is bad in law and requires to be quashed and set aside.
9.10 That the adjudicating authority has held that the duty payment was made from
wrong account and hence the rebate is erroneously sanctioned. It is the view of the
adjudicating authority that cenvat credit lying unutilized shall lapse on opting for full
exemption of duty under notification No.30/2004. For the purpose, the adjudicating
authority relies on cenvat credit rule 11 (3). The aforesaid rule is not applicable in the
facts and circumstances of the case. That for arriving at conclusion that the unutilized
cenvat credit shall lapse, the adjudicating authority has relied on sub rule 3 (ii) of rule 11.
That the said sub rule 3 (ii) is applicable only if the goods are exempted absolutely.
However, in the present case, the goods are not exempted in absolute terms. That any
exemption subject to a condition cannot be held as absolute exemption. It is to be
considered as a conditional exemption. Thus the cenvat lying unutilized shall not lapse as
provided under rule 11 (3). This aspect stands clarified by the departmental circular
also which prescribes that a manufacturer has an option to simultaneously avail
benefit of both the notifications. That if a manufacturer avails benefit of both the
notifications simultaneously, then, definitely, in those cases, some credit will always remain
unutilized or in balance in cenvat credit account of the manufacturer. Thus, the view
canvassed by the adjudicating authority is contra to the view of the department which is
laid down by the circular. As a matter of fact, this proposition of law that they can avail of
both the notifications is accepted now in the present order in original itself. If this is so,
then clearly, the embargo under rule 11 (3) cannot apply.
9.11 The finding
in the impugned order that they were only availing
notification No. 30 of 2004 is thus erroneous. They had made a reference vide letter
dated 2.1.2014 to the Assistant Commissioner bringing it to notice that even for
domestic clearance, duty was paid under notification No.29/2004 in March 2006 as well
as August 2007. Thus, primary finding that they were only availing full exemption for
domestic clearance under notification No.30/2004 is ex-facie erroneous.
9.12 That a plethora of judgments were brought to the notice of the adjudicating
authority as per para 7 of the order wherein a consistent view is taken that provisions
of rule 11 (3) are prospective and not retrospective and cannot apply to an assessee who
has already earned credit in the past. All these judgments have been wrongly
distinguished by the adjudicating authority. These judgments take a clear view that once
credit is earned for the period prior to 1.3.2007 i.e. the date on which rule 11 (3) came on
the statute book, such credit cannot be denied and that would amount to giving
retrospective effect to rule 11 (3). These judgments which were binding to the
adjudicating authority have not been followed and distinguished the same by
arguments and reasoning which can under no circumstances be justified. That the question
of applicability of rule11 (3) can only arise if exemption notification in question
granting exemption is absolute. Now, for two reasons, this is not the case. In the first
place, notification No. 30/2004 itself does not grant absolute exemption but a
conditional exemption which is that, exemption can only apply if credit is not avail
Appeal Nos. V.2(52)/38,39/Ahd-1/2014-15
& Stay Appl.Nos. 23,24 /2014-15
12
Hence, the
said notification is itself not absolute exemption. Therefore, even
linguistically speaking, rule 11 (3) cannot apply. Further more, in the scope of things, an
assessee can simultaneously avail notification No. 30/2004 and notification No.
29/2004 together. In such a case, if a view is taken that if the assessee avails
notification No.30/2004, the entire credit would lapse which would lead to
absurdity that he will lose his past credit though he wants to still avail of partial
exemption in future after 1.3.2007 under notification No.29/2004. Thus, to hold that
provision of rule 11 (3) leads to lapsing of credit is dearly absurd and ill-founded in the
context of scheme of notifications Nos. 30 and 29 of 2004. Such an interpretation would
have strange result of wiping off old credit even though the assessee wants to clear
his goods under notification No.29/2004. The said notification nowhere states that if credit
is availed in the past i.e. prior to 9.7.2004 when it entered into statute book, such
credit could not have lapsed after the notification came into force. Thus, if an
assessee functions only under notification No. 29/2004 whether prior or posterior to
1.3.2007 i.e. the date on which rule 11 (3) came into force, he will be entitled to utilize
his own credit available prior to 2004 as well as prior to 2007. Absurdity of the
department's argument would be that if such assessee simultaneously avails of
notification No.30/2004 after 1.3.2007, then, past credit prior to 1/32007 will lapse.That
there cannot be more discriminatory and absurd result on interpretation of the statute.ln
the facts and circumstances of the case and any law as applicable thereto, credit can
under no circumstances lapse. The impugned order is, therefore, ex-facie not sustainable
and is required to be set aside.
10.
Personal Hearing in the matter was fixed on 28.07.2014. Reiterated the submission.
All the Cenvat credit on inputs were reversed-para 6.1 of the 010. That they have not availed
cenvat credit even on the clearances made under Noti.No.29/2004(para-6.1 of the 010).The
Cenvat credit was still available and they have utilised it for the exports. Cited Nahar
Industries GOI 2012(283) ELT 444 and requested to allow the appeal.
11
have gone through the records of the case, appeal filed by the appellant and I
find that the moot issue to be decided in this case is as to whether the appellant are
eligible for rebate or otherwise.
12.
I find that the adjudicating authority has erred in the findings that the appellant having not
availed cenvat credit, were compulsorily required to avail complete exemption of duty under
Notification No.30/2004-CE and hence, the export of goods under Notification No.29/2004CE was not correct. I find that the Notification No. 29/2004-C.E., dated 9-7-2004,
grants partial exemption to goods manufactured and duty is chargeable @ 4% or 8%, and
Notification No. 30/2004-C.E., dated 9-7-2004 grants full exemption from payment of central
excise duty, subject to the condition that no cenvat credit is taken on the inputs consumed
in the manufacture of final product. The appellant could avail both the aforesaid
Notifications simultaneously in terms of clarification, issued by the C.B.E.C. vide. 4Circular No. 7 95/28/2004-CX., dated 28 - 7 2004. The basic condition for availing exemption
under Notification No. 30/2004-C.E, dated 9-7-2004 was that the appellant is not allowed
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
13
to take Cenvat Credit on the inputs utilized for manufacturing/processing of the finished
goods. Whereas for availing benefit under Notification No. 29/2004-C.E., dated 9-7- 2004,
there was no such condition of availing or not availing of the Cenvat Credit on the inputs utilized
for manufacturing/processing of the finished goods.
13.
I find that as per Board Circular No. 795/28/2004-CX dated 28-7-2004, the manufacturer
can avail both the Notifications No. 29/2004-C.E., and 30/2004-C.E., both dated 9-7- 2004
simultaneously provided the manufacturer maintains separate set of accounts for goods in
respect of which benefit of Notification No. 29/2004-C.E., dated 9-7-2004 is availed and
similarly, for goods in respect of which benefit of Notification No. 30/2004-C.E dated 9-72004 is availed. The C.B.E.C. further issued a Circular No., 845/3/2006- CX., dated 1-2-2007
to clarify the provision of simultaneous availment of Notification Nos. 29/2004-C.E., and
30/2004-C.E., both dated 9-7-2004 wherein it has been clearly mentioned that nonavailment of credit on inputs is a pre-condition for availing exemption under this
Notification No.30/2004-C.E. dated 9-7-2004 and if manufacturers avail input cenvat credit,
they would be ineligible for exemption under this Notification No.30/2004-C.E., dated 9-72004.However, Board further allowed the availment of proportionate credit on the inputs
utilized in the manufacture of goods cleared on payment of duty under Notification No.
29/2004-C.E., dated 9-7-2004 should be taken at the end of the month only. I find that the full
duty exemption provided under Noti.No.30/2004-CE dt. 9.7.2004 is a conditional one. It is not an
absolute one so the restriction as regards non-payment of duty on excisable goods as laid down
in Section 5A(1A) of the CEA, 1944 is not applicable.
14.
I find that during the relevant period, the appellant cleared the goods for export after
paying the concessional rate of excise duty 4% or 8% in terms of Notification No.
29/2004-C.E., dated 9-7-2004 and filed rebate claims under Rule 18 of the Central
Excise Rules, 2002. The appellant were not availing the cenvat credit on the inputs used in
the manufacture of the exported goods and thus were entitled to avail both the
Notification 29/2004-CE and 30/2004-C.E., simultaneously provided they followed the
provisions of above said CBEC Circulars.
15.
I find that the adjudicating authority has erred in the findings that the appellant were
not claiming the cenvat credit on the inputs used in the manufacture of the exported
goods, as they were working under exemption Notification No 30/2004-C E., dated
9.7.2004 which does not have any relevance as the option is with the manufacturer to avail or
not to avail cenvat credit on the inputs as the availment of cenvat credit is a beneficial
scheme and there is nothing in the Notification No. 29/2004-C.E, dated 9-7-2004 for the
manufacturer to compulsorily avail cenvat credit on the inputs. There is bar only on for
availment of Cenvat input credit under Notification No 30/2004-C E, dated 9-7-2004. Thus
the adjudicating authority has erred in holding that the appellant having not availed cenvat
credit will have to opt for exemption under Notification No.30/2004-CE and cannot pay duty
under Notification No.29/2004-CE.
16.
I find that the adjudicating authority has erred in the finding(
-the
Appeal Nos. V.2(52)/38,39/Ahd-1/2014-15
& Stay Appl.Nos. 23,24 /2014-15
14
appellant who have procured the raw materials duty free under advance licence scheme,
DEEC scheme and final export goods were manufactured from such duty free inputs
and on account of absence of duty paid nature of the raw materials, the appellant was
not entitled to cenvat credit as the appellant in their reply to show cause notice issued
by the department for recovery of already sanctioned rebate claims have submitted that
they were maintaining separate account for deemed credit and actual credit; that on
31.3.2003 they had an unutilized amount Rs.28,43,967/- in their deemed credit, which was
totally reversed by them by debit entry; that after 1.4.2003 the credit was admissible to
manufacturer only on the basis of duty paying documents and hence, the credit lying
unutilized was on account of various raw - materials procured on payment of duty and that
their records were audited upto December 2006 and no observation regarding availment of
wrong credit was ever made by central excise authority. I find that adjudicating authority did
not controvert the factual details that the appellant had a balance of Cenvat credit as on 17-012006 after reversal proportionate credit on goods lying in balance on account of opting full
exemption under Notification No. 30/2004 with effect from 17-01-2006. The relevant records
was verified and it has been revealed that appellant had debited entire balance of deemed
credit amounting to Rs. 28, 43, 967/- and Deemed credit balance was NIL as on 01-11-2003.
This fact is also verifiable from ER-1 return of month November'2003 & December'2003. Thus it
is obvious that there would not be any deemed credit balance after rescinding of Notification
No. 6/2002-CE (NT') dtd. 1-3-2002 & reversal of balance thereof and therefore duty was not
discharged from deemed credit. Further, it has been revealed from RG 23A Part-II Register
that they were taking Cenvat credit on inputs from 10-09-2004 to 16-01-2006 on the basis of
proper duty paying documents as informed by Range Officer vide letters F.No. AR1/Ashima/Arrear/010-21 -28/2011 -12 dtd. 23-12-2013 & 06-01-2014.
17.
In order to verify the facts letter dated 31.07.2014 was issued to the jurisdictional
Deputy Commissioner for sending the verification report regarding Cenvat Credit lying in
balance was availed on the basis of proper duty paying documents and as to whether the
appellant has reversed/paid total Rs.1,01,52,096/- equivalent to cenvat credit taken in
respect of inputs received for use in manufacture of the final products and was lying
in
stock, in process and contained in the final product lying in stock as on 17.1.2006 and in
respect of balance amount of cenvat credit alongwith the balance amount of cenvat credit
lying after reversal b y the appellant.
18
Verification report dated 09.092014 was send by Deputy Commissioner, Central
Excise, Division-I A'badi-1 wherein it was reported that the appellant have opted for full
exemption under noti.No.30/2004-CE and have reversed/paid total Rs. 1,01,52,096/equivalent to cenvat credit in respect of inputs received for use in manufacture of the said
final products and was lying in stock in process and contained in the final product lying in
stock as on 17.1.2006. The appellant have stopped availing cenvat credit on inputs after
16.1.2006 as per Noti.No.30/2004-CE. The balance amount of cenvat credit lying after
reversal of Rs. 1.01,52,096/- works out to Rs. 1,58,81,693/-
19
I view of the above verification report of the jurisdictional Deputy Commissioner, 1
Appeal Nos. V.2(52)/38,39/Ahd4/2014-15
& Stay Appl.Nos. 23,24 /2014-15
15
find that the appellant have availed cenvat credit during10.9.2004 to 16.1.2006 on raw
materials and cleared their goods on payment of duty to domestic market and under bond
for exports the duty stands accumulated in their cenvat account due to the fact that the
appellant had made exports under Bond and the said credit was lying unutilized as the
appellant did not opt of refund of such accumulated credit under Rule 5 of cenvat credit rules,
2004. The appellant w.e.f. 17.1.2006 opted for clearance under Notification No.30/2004, at
this time also they reversed proportionate credit on goods lying in balance. Even after debiting
proportionate amount in raw materials lying in factory on 16.1.2006, they were having
balance in their cenvat account which works out to Rs. 1,58,81,693/-
20.
I find that the adjudicating authority has erred in the findings that as per provisions of
Rule 11 of the Cenvat Credit Rules 2004, the unutilized credit lying in balances lapses on
the date on which the manufacturer commences clearance by availment of duty exemption
under Notification No.30/2004-CE. The appellant opted for full exemption under Notification
No.30/2004-CE on 16.1.2006 and hence, by virtue of cenvat credit Rules 2004, Rule 11,
sub-rule(3) the cenvat credit lying in the balance, lapsed on 16.1.2006 and hence, they
cannot utilize the same for the purpose of payment of duty for export under rebate.
21. The provision contained in Rule 11(3) of the Cenvat Credit Rules 2004 reads as under:
'Rule 11 (3) A manufacturer or producer of a final product shall be required to pay an amount
equivalent to the CENVAT dredit if any, taken by him in respect of inputs received for use in the
manufacture of the said final product and is lying in stock orb process or is contained in the final product
lying in stock, in-
22.
re
whole of the duty of excise tenable m the sad final
he opts for exemption
product manufactured or produced by him under a notification issued under section 54 of the Act;
or
(ii)
the said final product has been exempted absolutely under section 5A of the Act,
and after deducting the said amount fiun the balance of CENVAT credit Many, n/ing in his aed the
balance 'any, still remaking &banal-re and shalI not be albwed to be utilized for payment of duty
on any other final product whether cleared for home consumption or for export, or for payment of
service tax on any output service, whether provided in India or exported".
I find that the appellant has availed exemption from whole of duty of excise during the
relevant period and therefore it has been contended by the adjudicating authority that
Cenvat Credit lying in balance would lapse in terms of Rule 11(3). I find that the adjudicating
authority has erred in the findings that the appellant was only availing Noti.No.30/2004 as the
appellant vide letter dated 2.1.2014 has informed the jurisdictional Asstt. Commissioner that
even for domestic clearance duty was paid under Noti.No.29/2004-CE in March-2006 as well as
August-2007. Further the appellant has relied upon judgement of Honible Karnataka High
Court order dated 11.4.2011 on CEA No.109 of 2009 in the case of CCE, Bangalore-II Vs. Gokaldas
Intimate Wear reported in 2011 (270)ELT 351(Kar), CESTAT order in case of CCE Banglore-II
Vs. Mother diary 2009 (245) ELT — 413 (T-Bang) and CCE Chandigarh Vs. Saboo Alloys
Pvt. Ltd. 2008 (228) ELT 422 (T-Delhi) and contended that rule 11(3) of Cenvat Credit
Rule 2004 inserted w.e.f. 01,03.2007 vide Notification No. 10/07-CE(NT) dated 01.03.2007
and therefore its provision cannot be made applicable to impugned Cenvat Credit balance as
on 16.01.2006. Further Hon'ble Karnataka High Court in case of M/s Gokaldas Intimate Wear
2011(270) ELT 351 (KAR) has observed as under:
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
16
It was pointed out to us that in the year2008 (sic)sub-rule (3) was inserted by a Notification No. 10/2007
with effect from 1-3-2007, which reads as under
"(3) A manufacturer or producer of a final product shaft S required to pay an amount equivalent to the
CENVAT credit, if any, taken by him in respect of inputs received for use in The manufacture cite said
final productandisOhin stock orh process or is contained in the final product lying in stock it; (I)
he opts for exemption him whole of the duty of excise leviable on the said final
product manufactured orproduced by him underanotificafion issued under section 54 of the Act; or
00
the said final product has been exempted absolutely under section 5A of the Act,
and afterdeductingfilosad amount fium the balance of CENVATcredil (any Nog in his aedt the balance f
any sfillremainfrig shahalis and shall not be allowed to be utilized for payment of duty on any other final
product whether cleared for home consumption or for export, or for payment of service tax on any output
service, whether provided in India or exported"
23. Thus in view of the above it is dear from the aforesaid Rule that till 1-3-2007, the appellant
was entitled to benefit, of the cenvat credit in respect of inputs contained in the work in progress
and semi finished products. The said amendment is prospective in nature. It comes into effect from only 1-3-2007 and
in the instant case, the period is anterior to 1-3-2007 which has no application Further in above judgements,
it has been clearly held that the said Rule 11(3) came into effect only from 1.3.2007 and
effect of the same is prospective. Honble CESTAT in the case of CCE Banglore-II Vs.
Mother Dairy 2009(245) ELT 413 (T-Bang) has observed as under:"8.
On a very careful consideration of the issue, we find that this Bench had already
taken a view in some of the decisions that once input credit is taken legally, then the same
cannot be denied after the issue of exemption notification on the final products. We do not
want to differ from such a view at this stage. If the ratio of this decision is applied, they
would not be any necessity to withhold or deduct the amount due to the respondents. In
other words there was no need for reversal of input credit lying in stock and also in the
finished goods. Further, our attention was brought to amendment made In Cenvat Credit
Rules, 2004 wherein sub-rule 11(34) has been introduced. The effect of this amendment is
that when a product on which input Cenvat Credit taken is exempted by way of a Notification,
then the input credit lying in stock and contained in the finished goods should be necessarily
reversed It was argued that this provision came into effect from 1.3.2007 The period in the
present case is prior to 1.3.2007. On this, ground also, the action of the Original Authority
cannot be sustained Therefore, there was no merit in the revenue's appeal The same is
dismissed."
24.
The appellant have relied upon the following case laws :
i) Order of Hon'ble CESTAT in the case CCE
Chandigarh Vs. Saboo Alloys Pvt, Ltd.
2008 (228) ELT 422 (T-Del)
ii)
Revision authority's judgement in the case of Nahar Industries reported at 2012(283)ELT
444 and in case of Auro Spinning Mills reported at 2012(276)ELT 134
iii)
Hon'ble Supreme Court's judgement in the case of Eicher Motors Ltd. Vs Union of India
reported at 1999(106) ELT 3 and 1999(112) ELT 353 reported in the case of Dailchi Karkaria
Ltd.
25. I find that the appellant have also relied upon the 01A No.89/2008(Ahd-
Appeal Nos. V.2(52)/38,39/Ahd1/2014-15
& Stay Appl.Nos. 23,24 /201415
27
UCE/ID/Commr(A) dt. 29.5.2008 wherein Commissioner(A) has ordered that there is no bar in
refunding the duty paid through the actual credit or deemed credit account on the goods
exported by cash or cheque which is applicable to the facts of the present case.
26
I rely upon the judgement reported at 2014 (300) E.L.T. 481 (Guj.) in the case of
ARVIND LTD.Versus UNION OF INDIA(Special Civil Application No. 10887 of 2012 with S.C.A.
No. 10891 of 2012, decided on 19-6-2013) where it has been held that :
Export rebate - Claim of - Denied, on ground that payment of duty was at the will of the
assessee - Export rebate impermissible when assessee was exempt from payment of whole
duty but when he paid duty at the time of export permissible - Final products manufactured by
petitioner exempted from payment of duty by Notification No. 29/2004-C.E. as amended by
Notification No. 58/2008-C.E. - However, petitioner wrongly availed benefit of concessional rate
of duty under Notification No. 59/2008-C.E. which exempted cotton textile products in excess of
4% ad valorem - Thereafter, claims for rebate made - Revenue authorities rejected the claims
on ground that payment of duty on final products exported was at will of the assessee - Such
orders set aside, as petitioner was not liable to pay duty in light of absolute exemption granted
under Notification No. 29/2004-C.E. as amended by Notification No. 58/2004-C.E. r/w Section
5A(1A) of Central Excise Act, 1944 - When the petitioner was given exemption from payment of
whole of the duty, and if it paid duty at the time of exporting the goods, there was no reason why
it should be denied the rebate claimed which the petitioner was otherwise entitled to - Export
rebate claim allowed - Sections 5A(1A) and 11B of Central Excise Act, 1944 - Rule 18 of Central
Excise Rules, 2002. Mares 9, 10, 111
I find that the said case law is squarely applicable to the facts of the
present case and the appellant are entitled for the rebate claim under Rule 18 of
the CER, 2002.
27.
I also rely upon the case law reported at 2011 (272) E.L.T. 476 (G.O.I.) before
the Govt. of India, Ministry of Finance, Department of Revenue, Revisionary Authority Shri D.P.
Singh, Joint Secretary IN RE : INTER GLOBE SERVICES Order Nos. 1774-1775/2010-CX,
dated 20-12-2010 in F. Nos. 195/192 & 257/2008-RA wherein it has been held that :
Rebate - Exports, final •roduct whether exempted - Denial of rebate on the ground that
applicant working under Notification No. 30/2004-C.E. which grant full exemption if Cenvat
credit is not availed on inputs - Cenvat credit taken on chemicals used in
manufacturing/processing of processed fabrics and duty rightly paid under Notification No.
29/2004-C.E. - Applicant was availing both these Notifications simultaneously under Board's
Circular No. 795/28/2004-CX, dated 28-7-2004 - For availing Notification No. 29/2004-C.E. no
condition of non-availment of credit was imposed - However, to be separate accounts for both
these Notifications are to be maintained - Board also allowed that availment of proportionate
credit on inputs used in manufacture of goods cleared on payment of duty under Notification No.
29/2004-C.E. - Rebate admissible to applicant provided he has complied with Board's Circular
ibid - Impugned orders set aside and matter remanded to Original authority to decide the cases
afresh - Rule 18 of Central Excise Rule, 2002. Mares 7, 8, 9, 10, 11]
I find that the said case law is squarely applicable to the facts of the
present case and the appellant are entitled for the rebate claim under Rule 18 of
the CER, 2002.
Appeal Nos. V.2(52)/38,39/Ahd-I/2014-15
& Stay Appl.Nos. 23,24 /2014-15
18
28.
In view of above discussion and findings, I pass the following Order:
ORDER
I set aside the impugned orders and allow the appeals filed by the appellant.
(ANIL KUMAR)
COMMISSIONER (APPEALS-V),
CENTRAL EXCISE,
AHMEDABAD.
ATTES
Dated, /9/2014
(M.P.Vyas)
Superintendent (Appeals-V)
Central Excise, Ahmedabad
By Regd. Post A.D.
To
M/s Ashima Dyecot Ltd ,
Texcellence Complex,
K ho kha ra -Mehm a da bad,
Ahmedabad
Copy to:
1. The Chief Commissioner, Central Excise, Ahmedabad.
2. The Commissioner of Central Excise, Ahmedabad-I,
3. The Deputy/Asstt. Commr. Of Central Excise, Div-I, Ahmedabad-I
LiPBe Asstt. Commr.(System), Central Excise, H.Q.,Ahmedabad-I for uploading the order on
web site.
5. PA to Commissioner (Appeals-1i)
6. Guard File.
~

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