Custom, Excise & Service Tax Tribunal
Hishine Inks Pvt Ltd vs Valsad on 2 November, 2018
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In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No. E/10314/2016-DB
[Arising out of OIO-VLD-EXCUS-000-COM-0009-15-16 dated 30/12/2015 passed by the Commissioner of
Central Excise, Customs and Service Tax-Valsad]
M/s. Hishine Inks Pvt Ltd Appellant
Vs
C.C.E. & S.T -Valsad Respondent
Represented by:
For Appellant: Shri.Willingdon Christian (Advocate) For Respondent: Shri. L. Patra(A.R.) CORAM:
HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. RAJU, MEMBER (TECHNICAL) Date of Hearing: 01.10.2018 Date of Decision:02.11.2018 Final Order No. A / 12547 /2018 Per: Ramesh Nair Brief facts of the case are that the appellant were sanctioned rebate claims Vide 32 orders in original for total amount of Rs. 1,48,53,400/- in respect of Excise duty paid on indigenous raw-material namely, Dyes, Solvent, and Packaging material used in the manufacture of export goods.
The rebate claim was sanctioned under Rule 18 read with Notification No. 21/2004-CE (NT) dated 6.9.2004. Consequently, show cause notice dated 09.05.2014 came to be issued proposing to recover the aforesaid rebate amount under Section 11A of the Central Excise Act, 1944, on the ground that rebate of duty paid on materials/inputs used in the manufacture of resultant export products under advance licence is not allowable /admissible as per Condition No. (viii) of the Customs Notification No.. 96/2009-Cus. By
2|Page E/10314/2016-DB the impugned order, Ld. Commissioner has confirmed the demand for recovery of rebate along with interest under Section 11AB/11AA and imposed equal amount of penalty under Section 11AC. Being aggrieved by the said impugned order appellant filed the present appeal.
2. Shri. Willingdon Christian, Ld. Counsel appearing on behalf of the appellant submits that firstly, the subject Condition No.(viii) of the said Customs Notification No. 96/2009-Cus is not applicable to the appellant's case, as the appellant had not availed export rebate in respect of materials which they had imported duty free under the Notification No. 96/2009-Cus. He further submits that the subject Notification No. 96/2009-Cus is only for the sole purpose for allowing the benefit of exemption from payment of Customs duty on imports against advance authorization. The benefit of this Notification was availed by the appellant in respect of two imported raw materials, namely, Resin and Additives. Even if, the alleged contravention of Condition No.(viii) of the Notification No. 96/2009-Cus is to be held in favour of the Revenue, then also the legal remedy lies is to disallowing or take back such benefit of exemption from payment of Customs duty availed in respect of the said two imported raw materials. He submits the rebate sanctioned under Rule 18 of Central Excise Rules, 2002 and Central Excise Notification No. 21/2004-CE(NT) issued was under independent provision for rebate which does not carry any condition to the effect that any violation of Notification No. 96/2009-Cus is made then rebate will not be granted, therefore, importing the contravention of different Notification No. 96/2009- Cus for disallowing the rebate claim under Rule 18 is without authority of law. He submits that the sanction of rebate is in respect of three raw materials was on the basis of valid permission granted by the jurisdictional Deputy Commissioner who after verifying factual position of the nature of raw material, use in the finished goods and input output ratio granted the
3|Page E/10314/2016-DB permission and on that basis rebate claim was sanctioned. He submits that the permission order holds the field even today, as it has not been challenged before nor set aside by, in appropriate Appellate Authority. Consequently, in view of the said permission order having attained finality, the impugned order cannot sustain being illegal, without jurisdiction and beyond authority of law. He further submits that the whole exercise in this case is Revenue neutral. Even by the stretch of imagination, the appellant is hold to be not entitled to avail export rebate, they would be otherwise entitled to claim the refund of the Excise duty paid on such indigenously procured raw-materials in terms of Rule 5 of Cenvate Credit Rules, 2004. He further submits that the show cause notice dated 09.05.2014 is partly time barred under Section 11A. He also submits that as against the total 32 orders in original for granting rebate, the department has so far filed appeals against only 15 orders. He invited our attention to order in appeal No. DMN- EXCUS-000-APP-2010 to 224-13-14 dated 01.11.2013 reversing the sanction of 15 rebate claims. For the remaining 17 rebate claims, the Department has not filed any appeals against the orders in original sanctioning the 17 rebate claims. Therefore, in matter of such 17 rebate claims for recovery of rebate claims, the impugned order is not sustainable in law as it amounts to review of orders of Deputy Commissioner by the Commissioner, which is not permissible in law. In respect of this above submissions, he placed reliance on the following judgments.
Spentex Industries Ltd. Vs. CCE-2015-TIOL-239-SC Arvind Mills Ltd. Vs. CCE-2008 (240) ELT 613 (T) Mardia Chemicals Ltd. Vs. CCE-2006 (199) ELT 110 (T) National Tools (Export) Vs. UOI- 2017 (348) ELT 638 (Raj.) Hi Speed Offsets Vs. CCE-2014 (304) ELT 3 (Del)
4|Page E/10314/2016-DB Rajguru Enterprises Pvt. Ltd. Vs. CC (Export)-2011 (266) ELT 286 (Export) Bhagwati Gases Ltd. Vs. CCe- 2008 (226) ELT 478 (T) Coastal Gases & Chemicasl Pvt Ltd. Vs. CCE-1988 (33) ELT 437 (T) CCE Vs. Maharashtra State Bureau of Test Book Production & Curriculum Research-2015 (39) STR 235 (T) Wimco Limited Vs. CCE 1986 (26) ELT 877 (T) Zenith Spinners Vs. UOI-2015 (326) ELT 97 (Guj.) CCE Vs. Ineos ABS Limited- 2010 (254) ELT 628 (Guj.), 2011 (267) ELT A155 (SC).
3. Shri. L. Patra, Ld. Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides and perused the records, we find that in the facts of the present case the adjudicating authority has passed recovery order of sanctioned rebate claim which were sanctioned under Rule 18 read with Notification No. 21/2004-CE (NT). The ground for recovery of rebate claim is that the appellant have violated the conditions of (Viii) Customs Notification No. 96/2009-Cus. In ordered to understand whether there is any contravention of the Notifications and if yes, whether said contraventions will affect the eligibility of rebate to the appellant, we reproduced the Rule 18.
18. Rebate of duty.-
"Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.
Explanation. - For the purposes of this rule, "export", with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India and includes shipment of goods as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraf"
5|Page E/10314/2016-DB Notification No. 21/2004-CE (NT) dated 6.9.2004 , "Rebate of duty on excisable goods used in manufacture/ processing of export goods -- Procedure -- Notification No. 41/2001-C.E. (N.T.) superseded In exercise of the powers conferred by of rule 18 of the Central Excise Rules, 2002 and in supersession of the Ministry of Finance, Department of Revenue, notification No. 41/2001-Central Excise (N.T.), dated the 26th June, 2001 [G.S.R. 470(E) dated the 26th June, 2001], the Central Government hereby, directs that rebate of whole of the duty paid on excisable goods (hereinafter referred to as „materials‟) used in the manufacture or processing of export goods shall, on their exportation out of India, to any country except Nepal and Bhutan, be paid subject to the conditions and the procedure specified hereinafter :-
(1)Filing of declaration. - The manufacturer or processor shall file a declaration with the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured or processed along with their rate of duty leviable and manufacturing/processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality.
The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be exported.
(2)Verification of Input-output ratio. - The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise shall verify the correctness of the ratio of input and output mentioned in the declaration filed before commencement of export of such goods, if necessary, by calling for samples of finished goods or by inspecting such goods in the factory of manufacture or process. If, after such verification, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise is also satisfied that there is no likelihood of evasion of duty, he may grant permission to the applicant for manufacture or processing and export of finished goods. (3)Procurement of material. - The manufacturer or processor shall obtain the materials to be utilised in the manufacture of the finished goods intended for export directly from the registered factory in which such goods are produced, accompanied by an invoice under rule 11 of the Central Excise Rules, 2002 :
Provided that the manufacturer or processor may procure materials from dealers registered for the purposes of the CENVAT Credit Rules, 2002 under invoices issued by such dealers.
(4)Removal of materials or partially processed material for processing. - The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise may permit a manufacturer to remove the materials as such or after the said materials have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory -
6|Page E/10314/2016-DB (a) for the purposes of test, repairs, refining, reconditioning or carrying
out any other operation necessary for the manufacture of the finished goods and return the same to his factory without payment of duty for further use in the manufacture of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or process; or
(b) for the purpose of manufacture of intermediate products necessary for the manufacture or processing of finished goods and return the said intermediate products to his factory for further use in the manufacture or process of finished goods without payment of duty or remove the same, without payment of duty for export, provided that the waste, if any, arising in the course of such operation is also returned to the factory of manufacturer or processor;
(c) any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor.
(5)Procedure for export. - The goods shall be exported on the application in Form A.R.E. 2 specified in the Annexure to this notification and the procedures specified in Ministry of Finance (Department of Revenue) notification No.19/2004-Central Excise (N.T.), dated the 6th September, 2004 or in notification No. 42/2001-Central Excise (N.T.), dated the 26th June, 2001 shall be followed.
(6)Presentation of claim of rebate. - The claim for rebate of duty paid on materials used in the manufacture or processing of goods shall be lodged only with the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction of the place approved for manufacture or processing of such export goods.
Explanation. - "duty" means for the purposes of this notification, duties of excise collected under the following enactment, namely :-
(a) the Central Excise Act, 1944 (1 of 1944); (b) the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (c) the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (d) the National Calamity Contingent duty leviable under section 136 of
the Finance Act, 2001 (14 of 2001), as amended by Section 169 of the Finance Act, 2003 (32 of 2003) and further amended by Section 3 of the Finance Act, 2004 (13 of 2004);
(e) special excise duty collected under a Finance Act;
(f) additional duty of excise as levied under section 157 of the Finance Act, 2003 (32 of 2003);
(g) Education Cess on excisable goods as levied under clause 81 read with clause 83 of the Finance (No. 2) Bill, 2004.
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Annexure
ARE 2 No.______________
Original (White)/Duplicate (Buff)/Triplicate (Pink) Quadruplicate (Green)/Quintuplicate (Blue) Form A.R.E. 2 Combined application for removal of goods for export under claim for rebate of duty paid on excisable materials used in the manufacture and packing of such goods and removal of dutiable excisable goods for export under claim for rebate of finished stage Central Excise Duty or under bond without payment of finished stage Central Excise Duty leviable on export goods.
To The Superintendent of Central Excise, (Address) ___________________ (full postal address) Particulars of the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise from whom rebate shall be claimed/with whom bond is executed and his complete postal address __________________. 1.
I/We ______________ of ________________ propose to export the under mentioned goods (details of which are given in Table 1 below) to ____________________ (country of destination) by *air/sea/land/post parcel* under claim for rebate of duty paid on excisable materials used in the manufacture and packing of such goods. 2. *The finished goods being exported are not dutiable. 3. or We intended to claim the rebate of Central Excise Duty paid on clearances of goods for export under notification No. 19/2004-Central Excise (N.T.), dated the 6th September, 2004 issued under Rule 18 of Central Excise Rules, 2002.
or The export goods are intended to be cleared without payment of Central Excise Duty under notification No. 42/2001-Central Excise (N.T.), dated the 26th June, 2001 issued under Rule 19 of Central Excise (No. 2) Rules, 2001.
TABLE 1
8|Page E/10314/2016-DB
(Details of goods to be exported)
S1. Descrip Marks Gro Gross Descri Val Finished Invoi Bond Amou Rem
No. tion and ss Weig ption -ue Stage ce /under nt of arks
Of pack Nos. Wei ht of Central No. taking Rebat
ages No.pac ght And finish Excise and execut e
k quan ed duty date ed claime
ages tity goods Under d
of rule 19 under
good (if any) Rule
s 18
Rate Amt
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
*Strike out portion not applicable
**Quantity of goods to be furnished in units of sale where it is different than weight.
#Write NA where exports are under bond/letter of undertaking in terms of Rule 19 or where goods are not chargeable to duty. TABLE 2 Details of duty paid on excisable Materials and Packing materials used in manufacture of export goods for which rebate under notification _________ dated _____ is being claimed S1. Nam Cent Uni Qty. Na Inv Assessa Rate Dut Total Rebate R No e/des ral t used me oic ble of y Wastag admissi e . - Exci of e Value/ Centr Am es ble m cripti se Su No Unit al t. under ar on of Tarif ppl . (Rs.) Excis per rule 18 ks mate f ier an e duty unit (Rs.) rials/ Sub- d (Rs) packi head Va ng ing lue with / techn Un ical it speci (R ficati s.) on/ Quan tity Re Irr co ec ver ov abl er e ab le (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (1
4)
9|Page E/10314/2016-DB Declaration :
(a) We hereby certify that we have not availed facility of CENVAT credit under CENVAT Credit Rules, 2002.
(b) We hereby declare that the export is not in discharge of export obligation under a Value based Advance License issued prior to 31-3-95.
(c) We hereby declare that the materials on which input stage rebate in claimed are not sought to be imported under a Quantity Based Advance License issued prior to 31-3-95.
(d) We further declare that we shall not claim any Drawback on export of the consignment covered under this application.
(e) I/We hereby declare that the above particulars are true and correctly stated.
(f) We have been granted permission by Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise Vide C.No. __________ date __________ for working under Notification No. 21/2004-
Central Excise (N.T.), dated the 6th September, 2004. Time of Removal __________________ Signature of owner or his authorised agent with date Name in Block Letters & Designation SEAL Note 1 : The A.R.E. 2 should be submitted by the manufacturer at least 24 hours before intended removal of goods for export, to the Superintendent of Central Excise.
Note 2 : A running serial no. of the factory starting with one in every financial year should be allotted to every A.R.E. 2. FOR DEPARTMENT USE PART A Certification by the Central Excise Officer Certified that 1.
*duty has been paid on the goods described above or duty is payable as recorded at entry number___ in Daily Stock Account. or *the owner has entered into B-1 bond No ____________ /given an Undertaking ______under Rule 19 of Central Excise Rules, 2002 with the ____________________________ or *the finished goods being exported are not dutiable.
10 | P a g e E/10314/2016-DB Certified that I have opened and examined the packages No. ___________________ and found that the particulars stated and the description of goods given overleaf read with the invoice and the packing list (if any) correct *[and that all the packages have been stuffed in the container No. _______________ with Marks ________________]*and the same has been sealed with Central Excise Seal/*One Time Seal (OST) No. ________________ 2.
I have verified with the records, the declaration of the manufacture given at Sl. No. 3 overleaf regarding non-availment of credit under CENVAT Credit Rules, 2002 and found it to be true. 3.
Certified that I have drawn three representative samples from the consignment and have handed over two sets thereof duty sealed to the manufacturer/his authorised representative (wherever feasible). 4. Certified that the material consumption as indicated in Table 2 overleaf are in accordance with the declaration No. ________ filed by ________ on __________ 5.
Place : __________________
Date : __________________
Signature Signature
(Name in Block (Name in Block
Letters) Letters)
Superintendent of Inspector of Central
Central Excise Excise
*Strike out inapplicable portions
Note 3 : The details given in Table 2 may be verified by the Superintendent of Central Excise subsequent to clearances. For this purpose, a detailed verification report may be submitted by the Superintendent to the Assistant/Deputy Commissioner of Central Excise along with Triplicate copy of A.R.E. - 2.
Note 4 : The original, duplicate and Quintuplicate shall be returned to the manufacturer for presenting to the Customs Officer. PART B Certification by the Officer of Customs Certified that I have examined the consignment described overleaf and the seals on the packages were found intact and I have satisfied myself that particulars of the consignment are as specified overleaf except for the shortages mentioned below : 1.
___________________________________________________________ _____ Certified that the exports are not under Duty Drawback Scheme. It is further certified that exports are not in discharge of export obligation under Value Based Advance License or a Quantity Based Advance License issued before 31-3-95. 2.
11 | P a g e E/10314/2016-DB Certified that all copies of Shipping Bill/Bill of export contain endorsement of A.R.E. 2 No. in the space provided for indicating ARE 1. 3. Certified that the consignment was shipped under my supervision under *Shipping Bill No./Bill of Export No. ____________ dated _______________ which left for _________________ on _________________ which passed the frontier on ____________ 4. Duplicate copy of A.R.E. 2 Forwarded to Assistant/Deputy Commissioner of Central Excise ............. on ............... Place :
Date :
Signature (Name and designation of the Customs Officer in Block letters) (Seal) Note 5 : The customs shall send the duplicate to the address given at Sl.
No. 1 overleaf and handover original and quintuplicate to the exporter. PART C* Rebate Sanction Order Under rule 18(1) (On Original, Duplicate and Triplicate) Refund Order No. ______________ dated ______________ Rebate of Rs. ___________ (Rupees _____________ sanctioned vide cheque No. ___________ dated ____________ Place ______________ Date ______________ Assistant/Deputy Commissioner of Central Excise PART D Rebate Sanction Order under rule 18(2) (On Original, Duplicate and Triplicate ) Refund Order No. _______________ dated ______________________ Rebate of Rs. ____________________ (Rupees ________________________________ sanctioned vide cheque No. ___________________ dated __________________ Place __________________ Date _______________ Assistant/Deputy Commissioner of Central Excise Strike out inapplicable portions".
12 | P a g e E/10314/2016-DB Notification No. 96/2009-Cus dated 11.9.2009 as under:-
"Advance authorisation -- Exemption to imports thereunder In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India against an Advance Authorisation issued in terms of paragraph 4.1.3 of the Foreign Trade Policy (hereinafter referred to as the said authorisation) from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon, respectively, under sections 3, 8B and 9A of the said Customs Tariff Act, subject to the following conditions, namely :-
(i) that the said authorisation is produced before the proper officer of customs at the time of clearance for debit;
(ii) that the said authorisation bears,-
(a) the name and address of the importer and the supporting manufacturer in cases where the authorisation has been issued to a merchant exporter; and
(b) the shipping bill number(s) and date(s) and description, quantity and value of exports of the resultant product in cases where import takes place after fulfilment of export obligation; or
(c) the description and other specifications where applicable of the imported materials and the description, quantity and value of exports of the resultant product in cases where import takes place before fulfilment of export obligation;
(iii) that the materials imported correspond to the description and other specifications where applicable mentioned in the authorisation and the value and quantity thereof are within the limits specified in the said authorisation;
(iv) that in respect of imports made before the discharge of export obligation, the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification are not complied with, together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials;
(v) that in respect of imports made after the discharge of export obligation, if facility of CENVAT Credit under CENVAT Credit Rules, 2004 has been availed, then the importer shall, at the time of clearance
13 | P a g e E/10314/2016-DB of the imported materials furnish a bond to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself, to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture of dutiable goods and to submit a certificate, from the jurisdictional Central Excise officer or from a specified chartered accountant within six months from the date of clearance of the said materials, that the imported materials have been so used :
Provided further that if the importer pays additional duty of customs leviable on the imported materials but for the exemption contained herein, then the imported materials may be cleared without furnishing a bond specified in this condition and the additional duty of customs so paid shall be eligible for availing CENVAT Credit under the CENVAT Credit Rules, 2004;
(vi) that in respect of imports made after the discharge of export obligation in full, and if facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 has not been availed and the importer furnishes proof to this effect to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs as the case may be, then the imported materials may be cleared without furnishing a bond specified in condition (v);
(vii) that the imports and exports are undertaken through seaports at Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar, Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla, Kolkata, Krishnapatnam, Magdalla, Mangalore, Marmagoa, Muldwarka, Mumbai, Mundhra, Nagapattinam, Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai, Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum and Varanasi or through any of the Inland Container Depots at Agra, Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chheharata (Amritsar), Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Durgapur (Export Promotion Industrial Park), Faridabad, Garhi Harsaru, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur, Kota, Kundli, Loni (District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep (District Raisen), Miraj, Moradabad, Nagpur, Nasik, Pimpri (Pune), Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur(Nainital), Salem, Singanalur, Surat, Surajpur, Tirupur, Tuticorin, Udaipur, Vadodara, Varanasi, , Waluj (Aurangabad) or through the Land Customs Station at Agartala, Amritsar Rail Cargo, Attari Road, Changrabandha, Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi or a Special Economic Zone notified under section 4 of the Special Economic Zones Act, 2005 (28 of 2005) :
Provided that the Commissioner of Customs may with in the jurisdiction , by special order, or by a Public Notice, and subject to such conditions as may be specified by him, permits import and export
14 | P a g e E/10314/2016-DB from any other seaport/airport/inland container depot or through any land customs station;
(viii) that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within the period specified in the said authorization or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorization and in respect of which facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 has not been availed :
Provided that an Advance Intermediate authorization holder shall discharge export obligation by supplying the resultant products to exporter in terms of paragraph 4.1.3 (ii) of the Foreign Trade Policy;
(ix) that the importer produces evidence of discharge of export obligation to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within a period of sixty days of the expiry of period allowed for fulfilment of export obligation, or within such extended period as the said Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow;
(x) that the said authorisation shall not be transferred and the said materials shall not be transferred or sold :
Provided that the said materials may be transferred to a job worker for processing subject to complying with the conditions specified in the relevant Central Excise notifications permitting transfer of materials for job work :
Provided further that, no such transfer for purposes of job work shall be effected to the units located in areas eligible for area based exemptions from the levy of excise duty in terms of notification Nos. 49/03-C.E. and 50/03-C.E. both dated 10th June, 2003, 32/99-C.E., dated 8th July, 1999, 33/99-C.E., dated 8th July, 1999, 8/04-C.E., dated 21st January, 2004, 20/07-C.E. dated 25th April, 2007, 56/02- C.E., dated 14th November, 2002, 57/02-C.E. dated 14th November, 2002, 71/03-C.E., dated 9th September, 2003, 56/03-C.E. dated 25th June, 2003 and 39/01-C.E., dated 31st July, 2001;
(xi) that in relation to the said authorisation issued to a merchant exporter, any bond required to be executed by the importer in terms of this notification shall be executed jointly by the merchant exporter and the supporting manufacturer binding themselves jointly and severally to comply with the conditions specified in this notification.
2. Where the materials are found defective or unfit for use, the said materials may be re-exported back to the foreign supplier within six months from the date of clearance of the said material or such extended period not exceeding a further period of six months as the Commissioner of Customs may allow :
Provided that at the time of re-export the materials are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant 15 | P a g e E/10314/2016-DB Commissioner of Customs, as the case may be, as the materials which were imported.
3. Notwithstanding anything contained in this notification, the actual user condition specified in condition numbers (viii) and (x) shall not be applicable in respect of authorisation issued for import of raw sugar for imports made from the 17th February, 2009 till 30th September, 2009 and the export obligation may also be fulfilled by procuring white sugar from any other factory with effect from the 17th February, 2009. Explanation, - For the purposes of this notification,-
(i) "Dutiable goods" means excisable goods which are not exempt from central excise duty and which are not chargeable to „nil‟ rate of central excise duty;
(ii) "Foreign Trade Policy" means the Foreign Trade Policy 2009- 2014, published by the Government of India in the Ministry of Commerce and Industry vide notification No. 1/2009-2014, dated the 27th August 2009 as amended from time to time;
(iii) "Licensing Authority or Regional Authority" means the Director General of Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant a licence under the said Act;
(iv) "Manufacture" has the same meaning as assigned to it in paragraph 9.37 of the Foreign Trade Policy;
(v) "Materials" means-
(a) raw materials, components, intermediates, consumables, catalysts and parts which are required for manufacture of resultant product;
(b) mandatory spares within a value limit of ten per cent. of the value of the licence which are required to be exported along with the resultant product;
(c) fuel required for manufacture of resultant product;
(d) packaging materials required for packing of resultant product;
(vi) "Specified Chartered Accountant" means a statutory auditor or a Chartered Accountant who certifies the importer‟s financial records under the Companies Act, 1956 (1 of 1956) or the Sales Tax/Value Added Tax Act of the State Government or the Income Tax Act, 1961 (43 of 1961)".
From the reading of above Rule 18 of the Central Excise Rule, 2002 and Notification No. 21/2004-CE (NT) issued there under. We find that 16 | P a g e E/10314/2016-DB there is no conditions in the said Notification that if any Contravention of the condition of Notification No. 96/2009-Cus is made then the assessee is not be eligible for rebate of duty paid on raw material used in the export goods in terms of Rule 18 and Notification issued there under. We find that the Rule 18 Notification No. 29/2004-CE is self contained statutory provision for granting rebate of duty paid on raw material used in the export goods subject to certain procedure /permission. We find that the appellant have scrupulously followed the procedure and also obtained the permission, only after compliance thereof the rebate was sanctioned, since, in view of this position, it is not permissible in law to import any extraneous conditions of some different Notification into the provision of rebate and rebate cannot be rejected for that reason. Similarly, by reading the Notification No. 96/2009- Cus there is no condition with reference to the rebate provision of Rule 18 and Notification No. 21/2004-CE. From the facts of the case it is undisputed that even by stretch of imagination it is interpreted that due to contravention of the condition of Notification No. 96/2009-Cus the rebate cannot be sanctioned. We find that the appellant have claimed the rebate only in respect of indigenously procured raw material on which no benefit of Notification No. 96/2009-Cus was availed, therefore, on this fact even the allegation in the show cause notice even though it is not sustainable as irrelevant with the sanction of rebate claim under Rule 18. Therefore, on both counts the adjudication authority has gravely arred in passing impugned order by which recovery of the sanctioned rebate was confirmed. The order of the adjudicating authority is without authority of law. As there is no provision in the statute to recovery the rebate claims sanctioned under Rule 18 for violation of condition of Notification No. 96/2009-Cus.
5. As per our above discussion, we are of the considered view that appellant was legally entitled for rebate claim even if there is any violation 17 | P a g e E/10314/2016-DB of conditions of Notification No. 96/2009-Cus if any, therefore, the order for recovery of the said rebate claim is absolutely illegal and not tenable.
6. Accordingly, the impugned order is set aside, appeal is allowed.
(Pronounced in the open court on 02.11.2018 ) (Raju) (Ramesh Nair) Member (Technical) Member (Judicial) Prachi