TaxTMI 
TaxTMI 
2012 (10) TMI 339
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....e Duty with effect from 9-7-2004, vide Notification No. 6/2002-Central Excise, dated 1-3-2002. The applicant also manufactures parts of tractors, viz. IC Engines, Transmission, assembly Sheet Metal components, etc., classifiable under Ch. 84 & 87 of the Central Excise Tariff. Thus both the Tractors, as well as parts of tractors, referred above as "aggregates" by the applicant are exempted from payment of duty, vide Sr. No. 295 & 296 of Notification No. 6/2002-C.E., dated 1-3-2002. The applicants chose to pay the duty on the aggregates used in the manufacture of tractors exported. The applicants filed their claim for drawback of the duty paid on inputs used in the manufacture of tractors exported. With respect to the claim for the drawback of the duty paid on aggregates used in the manufacture of tractors exported, the adjudicating authority rejected the applicants claim for drawback of the duty on "aggregates" on the ground that the applicant was not liable to pay duty on the aggregates, and as such their claim has not been considered for allowing drawback. 3. Being aggrieved by the said Orders-in-Original, applicant filed appeal before Commissioner (Appeals), who rejected ....
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....bly and sheet metal components manufactured and captively consumed in the manufacture of tractors since Sl. No. 92 of Notification No. 6/2006-C.E., dated 1-3-2006 which specifies nil rate of duty in respect of the parts manufactured and captively consumed in the manufacture of tractors, is a conditional notification and not absolutely notification. 4.5 A close reading of Section 5A(1) and Section 5A(1A) would clearly show that the Central Government has power, by way of issuing notification, to exempt either absolutely or subject to conditions as may be specified in the Notification. In other words exemption granted can be either absolutely (Unconditional) or subject to certain conditions stipulated in the notification itself. However, Section 5A(1A) would apply only in the case where the exemption from the whole of the duty is granted absolutely i.e. unconditionally. When the notification grants exemption from the whole of the duty by stipulating the condition in the notification then such notification is not covered under Section 5A(1). The excisable goods covered by full exemption subject to certain condition are not covered by the bar provided under Section 5A(1A). 4....
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....the proportion in which the material or components are used in the production or manufacture of goods and the duties paid on such materials and components should be taken into account. In other words, for fixation of brand rate under the circumstances mentioned in Rule 6 and Rule 7 the duties paid on the material used in the manufacture of goods exported should be taken into account. In the present case, it is as undisputed fact that the duties had been paid on the aggregates. The Assistant Commissioner of Central Excise in his Order-in-Original dated 29-6-2007 also did not dispute the fact that the applicants had to pay the duty on the aggregates. In fact he proceeds on the basis that the duty should have been paid on 5th of the month succeeding the month in which the aggregates are used in the manufacture of tractors cleared for export. Therefore, when the duty has already been paid on the aggregates, the same had to be taken into account for determining the brand rate of drawback. The Commissioner of Central Excise (Appeals) in his earlier Order-in-Appeal dated 14-9-2007 also specifically held that duty is payable on the aggregates. The impugned order of Commissioner of Central ....
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....appellant has relied upon the Order-in-Appeal dated 14-7-2009, wherein the Order of Assistant Commissioner regarding payment of interest on duty already paid has been upheld. The issue before the Commissioner (Appeals) was not the dutiability of the aggregate, i.e. I.C. Engine, Transmission assembly and Steel Metal Components but the interest on such payment of duty. It was the assessee who paid the duty on own volition, and the same was not even agitated by them before the Assistant Commissioner or even Commissioner (Appeals) as well. 5.4 The issue before Assistant Commissioner was not relating to short payment or non-payment of duty on the aggregates. The Show Cause Notice issued was not for the recovery of "duty". Thus it cannot be inferred that the department approved of such payments of duty by the assessee. The order passed by the Commissioner (Appeals) on 14-7-2009 was in this context. The Commissioner (Appeals) is rather very categorical, when he stated in the said order that in fact they have not agitated this issue. Thus, it is clear that Commissioner (Appeals) has not applied his mind on the dutiability of these items but only the interest aspect. Commissio....
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.... in the notification that the exemption has to be availed mandatorily. 5.11 The Rules 6 & 7 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 and Circular 14/2003-Cus., dated 6-3-2003 rightly deals with duty element paid. It does not deal with the situation, where duty has been paid without authority with an intention to avail export benefit and whether such payment can be included for consideration while fixing brand rate. Hence, the contention set out in this Para by the appellant is baseless and has no relevance with Rules 6 & 7 of the Drawback Rules. 5.12 The Circular No. 510/06/2000-C.E., dated 3-2-2000 deals with sanction of rebate and not fixation of brand rate of Drawback purpose. In the brand rate fixation, a procedure has been laid down for verification of payment of duty and the utilization of the raw material actually consumed in the production of the finished product which has been exported and for which fixation of brand rate has been claimed. It is on such verification, this anomaly has been noticed. Thus, this circular is not applicable in the instant case. 5.13 It may be mentioned here that the assessee is availing credi....
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.... order-in-appeal. 8. Government observes that applicant manufactures, tractors and parts of tractors viz. IC engines, transmission assembly and sheet metal components referred together as aggregates, classifiable under Chapter 84 & 87 of Central Excise Tariff which are exempted from payment of Central Excise duty vide Notification No. 6/2002-Central Excise, dated 1-3-2002. However applicants choose to pay duty on part of tractors (aggregates) on their own volition. They subsequently exported tractors and filed application of fixation of brand rate of drawback in r/o duty paid on such aggregates. The original authority rejected their drawback brand rate fixation application on the grounds that 'aggregates' being part of tractors are exempted from payment of duty vide Sr. No. 295 and 296 of the Notification No. 6/2002-C.E., dated 1-3-2002, as amended and duty was not required to be paid. The applicant preferred appeal against the impugned Order-in-Original before the Commissioner (Appeals), who rejected the same by upholding the impugned Order-in-Original. 9. Government observes that in this Revision Application, the applicant has mainly contended that the Commissione....