TaxTMI 
TaxTMI 
2010 (2) TMI 938
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....xport under claim for rebate of duty paid on goods, under the provision of Section 118 of the Central Excise Act, 1944 (hereinafter referred to as the Act) read with Rule 18 of Central Excise Rules, 2002 (hereinafter referred to as the Rules), The Assistant Commissioner, Central Excise Division, Shimla vide orders-in-original sanctioned their rebate claims in cash. 3. Being aggrieved with the order of the adjudicating authority, the department filed appeals with the Commissioner (Appeals) on the following grounds :- 3.1 That while working under Notification No. 30/2004-C.E., they are neither required to pay duty nor they can pay duty on the goods being manufactured and cleared by them as they are not availing credit of inputs. 3.2 That Notification No. 29/2004-C.E., prescribes an option of clearance of goods on payment of duty @ 4% adv. for pure cotton goods and @ 8% adv. for other goods and Notification No. 30/2004-C.E., provides full exemption from payment of central excise duty subject to the condition that cenvat credit of duty paid on inputs is not availed. These notifications are independent and there is no restriction on availing both simultaneously. Howeve....
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....licants when they have availed no input cenvat credit on the export goods which were therefore exempt from payment of duty under Notification No. 30/2004-C.E., and duty so paid by the applicants could be refunded in the manner of re-credit only and not in cash. 5. Aggrieved by these orders-in-appeal, the applicants, have filed these revision applications on the following grounds :- 5.1 The respondent wrongly rejected the rebate claim of central excise duty actually paid by the applicant @ 4% (cotton yarns) and @ 8% (cotton synthetic blended yarns) on exports made out of India. Rule 18 of the Central Excise Rules specifically refers to rebate/refund of actual duty paid by the exporter on the goods exported out of India irrespective of applicable or effective rate of duty on such goods. Therefore, the impugned order is contrary to the provisions of Rule 18 of the Central Excise Rules, hence liable to be set aside. 5.2 The Commissioner (Appeals) has relied upon the revision order No. 990/2006 dated 21-11-2006 in case of Nahar Industrial Enterprises v. Joint Commissioner, Department of Revenue, Ministry of Finance, New Delhi. It is important to note here that the Comm....
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....d yarns) on the goods exported out of India and the actual amount paid as duty of excise is liable to be refunded, in terms of Rule 18 of the Central Excise Rules. Therefore, the applicant is eligible for cash refund of actual amount of duty paid on exports. 5.7 Moreover, the applicants has declared/mentioned that they are working under Notification No. 29/2004-C.E., in all the relevant documents. The excise invoices raised under Rule 11 of the Central Excise Rules, 2002 by the applicant also finds mention of the Notification No. 29/2004-C.E., while clearing the goods. Further, in form ARE-1 prepared for the clearance of goods for export, the applicant has declared that the shipment is exported under Notification 29/2004-C.E. The same fact is also mentioned in the monthly ER-I returns of the applicant. 5.8 Further, there is no option available with the department to allow the rebate claim partial in cash and partial through reversal in cenvat account. In this context the Central Board of Excise and Customs while considering the issue in respect of rebate of duty on exports issued a clarification by way of Circular No. 687/3/2003-CX., dated 3-1-2003. By way of this clari....
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....nt though was making exports under Notification No. 29/2004-C.E., but has not availed cenvat credit on inputs. Therefore, to hold that the applicant is only working under Notification No. 30/2004-C.E., is totally baseless. 5.12 That for rejecting the rebate claim, the applicant authority has baselessly relied upon the fact that the applicant has not taken cenvat on inputs w.e.f. 1-9-2004 and presumed that the finished goods manufactured from such inputs would be cleared only under Notification No. 30/2004-C.E. In this regard it is submitted that the assessee has availed cenvat credit on inputs in respect of goods cleared under Notification No. 29/2004-C.E., in domestic as well as export market, except where the exports were made by claiming higher rate of duty drawback. This fact has also been accepted by the Commissioner (Appeals) in his order dated 9-2-2009. Moreover, the Hon'ble Tribunal in the case of M/s. Gayatri Laboratories Pvt. Ltd. v. CCE, Mumbai [2006 (194) E.L.T. 73] has categorically observed that if the assessee chooses to clear their exports by not availing benefit of notification, they cannot be compelled to do so. 6. The cases were listed for personal he....
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....at of M/s. Nahar Industrial Enterprises which was decided by the revisionary authority vide its Order No. 990, dated 21-11-2006. 8. Govt., has examined the relevant records, both oral and written submissions of the applicants and also perused the orders passed by the lower authorities. 9. From the perusal of records, Govt., observes that prior to 9-7-2004, the yarn manufactured by the applicants were chargeable to central excise duty of 16% in terms of Chapter 52 and 55 of the Central Excise Tariff Act, 1985. The Central Government has issued the exemption Notification No. 29/2004-C.E., dated 9-7-2004, for granting partial exemption by which the goods manufactured are chargeable to duty 4% or 8%, and Notification No. 30/2004-C.E., dated 9-7-2004 granting 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 applicants were availing both the aforesaid Notifications simultaneously as informed by them to the excise authorities vide their letters dated 30-3-2005 in terms of clarification issued by the C.B.E.C. vide its Circular No. 795/28/2004-CX., dated 28-....
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....the manufacture of finished goods cleared for home consumption under Notification No. 29/2004-C.E., on payment of duty and were also maintaining proper separate records for the same as per the Board Circular. They were entitled to avail both the Notification 29/2004-C.E., and 30/2004-C.E., simultaneously if they keep separate records for the same. The Commissioner (Appeals) has drawn a conclusion that as the applicants were not claiming the cenvat credit on the inputs used in the manufacture of the exported goods, hence they were working under exemption Notification No. 30/2004-C.E., dated 9-7-2004. Govt. observes that this conclusion of the Commissioner (Appeals) is without any basis as the applicants were declaring in their various documents namely Shipping Bill, Invoice and ARE-1s that they are working under Notification No. 29/2004-C.E., dated 9-7-2004 as they were clearing the goods for export and domestic market under Notification No. 29/2004-C.E., on payment of duty. Moreover, 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.....
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....led revision applications against the said order-in-appeal contending that party was required to pay duty in terms of Notification No. 29/2004-C.E., dated 9-7-2004 @ 4% or 8% as the case may be on the stocks of finished goods lying in stock on the date of filing declaration. The said plea of department was accepted by Revisionary Authority vide Order No. 990/06 dated 21-11-2006 mentioned above. In the said case party had not opted for clearing goods under Notification No. 29/2004-C.E., dated 9-7-2004. Whereas in the present case applicant party has opted for simultaneously availment of both the Notifications Nos. 29/04-C.E., & 30/04-CE., both dated 9-7-2004. This fact is not disputed by department. The objection of the department that since applicant was not availing the cenvat credit on inputs, he was supposed to avail full exemption from duty under Notification No. 30/04-C.E., dated 9-7-2004 is not correct because for availing Notification 29/04-C.E., there is no condition to avail cenvat credit of duty paid on inputs. The benefit of both Notifications can be availed simultaneously in terms of Board Circular No. 795/28/2004-CX., dated 28-7-2004 and 845/3/2007-CX., dated 1-2-2007.....