TaxTMI 
TaxTMI 
2010 (5) TMI 411
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....ed to pay 10% of the total price of exempted goods as per Rule 6(3)(b) of Cenvat Credit Rules, 2004. As no such payment was made, the appellant was issued a show cause notice dated 18-8-2008 proposing to demand an amount of Rs. 2,91,200/- being 10% of the price of the exempted goods. Demand of interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act, 1944 imposition of penalty under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 were also proposed in the show cause notice. 2.2 The Adjudicating Authority after following the principles of natural justice, confirmed the demand raised by the show cause notice and also imposed penalties and demanded interest under the provisions of Section 11AB of the Central Excise Act, 1944. Aggrieved by such an order, appellant preferred an appeal to the learned Commissioner (Appeals). Learned Commissioner (Appeals) after granting an opportunity of personal hearing and after considering the sub missions made before him, came to the conclusion that the Order-in-Original is correct and coming to such a conclusion, upheld the order and rejected the appeal filed by the appe....
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....sition that where the definition of an expression in a definition clause is preceded by the works "unless the context otherwise requires", normally the definition given in the section should be applied and given effect to but this normal rule may however be departed from if there be something in the context to show that the definition should not be applied. 4. Learned JDR. on the other hand would submit that the goods which were cleared by the appellants were exempted from payment of duty as per Notification No. 34/2006. It is his submission that said notification was issued by the Government of India under the provisions of Section 5A of the Central Excise Act, 1944. He would draw my attention that the exemption has been granted in the public interest. He would submit that once there is an exemption, and any inputs have been used for the manufacturing of such product, the provisions of Rule 6(3)(b) of the Central Excise Rules will apply and the appellant is required to debit an amount of 10% of the value of the exempted goods cleared from the factory premises. It is his submission that the Commissioner (Appeals) has correctly come to the conclusion that the appellant has no case.....
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....c beverages but excluding other products classifiable in Chapters 1 to 24 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); (ii) in the case of service provider other than hotel or stand alone restaurant, capital goods including spares, office equipment, professional equipment, office furniture and consumables, related to its service sector business, when cleared against a Served from India Scheme Certificate, (hereinafter referred to as the said Certificate) issued under paragraph 3.6.4 of the Foreign Trade Policy, from - (1) the whole of the duty of excise leviable thereon under the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (2) the whole of the additional duty of excise leviable thereon under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1958); and (3) the whole of the additional duty of excise leviable thereon under Section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978) Subject to the following conditions, namely :- (i) that the said certificate has been issued to a service provider by the Regional Authority and it is ....
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.... for "debit of the duties leviable on the goods, but for this exemption." This would clearly indicate that the conditions in the SFIS certificate are nothing but discharge of the duty which has to be paid by the appellant to the Government of India. This would almost equal to the debits which are being made in the letter of undertaking furnished by an assessee for clearing the goods for export without payment of duty, as per provisions in Central Excise Rules, 2002, and the said debits are considered as discharge of duty liability and once the proof of export is produced, the amounts debited are re-credited. It is undisputed, in the case be fore me, that the debits which were made in the SFIS certificate were against the clearance which could be procured legally by the service provider and the holder of SFIS certificate. 8. It is also pertinent to note that subsequent to the issuance of the Notification No. 34/2006-C.E., dated 14-6-2006 and Central Board of Excise & Customs, vide Circular No. 837/14/2006-CX., dated 3-11-2006 had issued the following clarification: "2. References have been received, from Trade and DGFT to prescribe a procedure for debiting the original scrip issue....
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....tral Excise Officer of the assessees from where goods are cleared under SFIS. The CBEC circular also very specifically clarifies that the original certificate has to be produced before the jurisdictional Central Excise Officer for "debiting the duties of excise leviable on the goods". The wordings of notification and subsequent CBEC Circular, would make it clear that the duty liability which has been debited in the SFIS scrip, would amount to discharge of duty liability and not amounting to exemption, as was proposed by Revenue. 9. I find that Hon'ble High Court of Judicature at Madras in the case of Tanfac Industries Ltd. v. CCE (supra) had considered an issue which was identical. In the said case their lordships were considering whether the debits made under DEPB script is equivalent to payment of duty in cash. I find that their Lordship has held as under "6. We are here concerned with the question, whether the debits under DEPB is equivalent to payment of duty in cash. 7......... 8....... 9.......... 10.......... 11......... 12. In fact, in that case, there were three bills of entries, only one of them was goods exported under DEEC Scheme and other two were under ....