2012 (12) TMI 853

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....tion 11AB of Central Excise Act, 1944. The details of duty demands confirmed by the impugned orders are shown below in tabular form:- Sr. No. Appeal No. Period of dispute Amount (Rs) 1 E/675/09-Mum 01.02.2007 to 30.06.2007 (A) 4,55,99,931/- (B) 10,52,45,486 1.07.2007 to 31.12.2007 (C) 8,28,20,311/- (D) 6,63,10,952/- 2 E/1060/09-Mum February 2007 to June 2007 10358014/- 3  E/1182/09-Mum Nov.2007 to March 2008 (A) 82,34,084 (B) 9,36,861/- 4  E/1190/09-Mum January,2008 to March, 2008 (A) 7,12,75,282/- (B)3,81,83,890/- 2.1 In respect of Appeals No.E/675,1060 & 1190/09-Mum, in the impugned orders, the Commissioner has also imposed equal amount of penalties under Rule 15(2) of Cenvat Credit Rules, 2004. In respect of Appeal No. E/1182/09-Mum, the Commissioner has imposed a penalty of Rs. 2000/- under Rule 15(3) of the Cenvat Credit Rules, 2004. 3. The brief facts of the case are that the appellant assessee is engaged in the manufacture of finished excisable goods namely Tractors falling under Heading 8701, IC engines and transmission assembly falling under Chapter Heading 8408 and 8483 and parts thereof falling under Chapter Heading 8409,8708 and 848....

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....s were initiated by issue of various amounts of Cenvat credits along with interest and proposing imposition of penalties on the assessee under the relevant provisions of Cenvat Credit Rules, 2004 read with relevant provisions of Central Excise Act, 1944. Upon adjudication of the show-cause notices, the Commissioner has confirmed the demand of CENVAT Credits along with interest and imposed various amounts of penalties on the assessee in the impugned orders as already mentioned above. Hence, these appeals have been filed by the appellant assessee. 4. We have heard both sides at length. 5. Appearing for the appellant assessee, Shri V. Sridharan, learned Sr. Counsel submitted that during the relevant period, the assessee took credit of duty paid on the entire quantity of inputs received and used in the manufacture of dutiable parts cleared outside and tractors, which according to the department are exempted. Accordingly, whenever the tractors were cleared for home consumption, the appellant was paying the amount equal to 10% of sale price of the tractors in terms of Rule 6(3)(b) of Cenvat Credit Rules. However, appellant did not pay 10% of sale price of the tractors exported in view ....

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....ed under Bond and the issue is squarely covered by the judgment of the Hon'ble High Court of Bombay in the case of Repro India Ltd. Vs. UOI reported in 2009 (235) ELT 614 (Bom) wherein it has been held that exempted goods can be exported under Bond in terms of Rule 19 of the Central Excise Rules, 2002. It has also been held that in terms of Rule 6(6)(v) of the Cenvat Credit Rules, the provisions of Rule 6(1) and Rule (3) are not applicable in respect of excisable goods cleared without payment of duty for export under Bond. He also submitted this judgment has been accepted by the department and the judgment has been followed by the various High Courts and Tribunals. 6. Appearing for the Revenue, Shri K.M. Mondal, learned Special Consultant submitted that the tractors are exempted vide Sr. No. 40 of Notification No. 6/2006 dated 1.3.2006. Hence, the tractors are exempted goods within the meaning of Rule 2(d) of the meaning of Rule 2(d) of the Cenvat Credit Rules, 2004. He also referred to the Tribunal's decision in the appellant's own case reported in 2007 (211) ELT 481 (T) in this regard. In his submission, exempted goods cannot be exported under Bond, hence the appellant are requi....

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....n the case of Repro India Ltd. (supra), the Hon'ble Bombay High Court has held that exempted goods can be exported under Bond/UT-1 in terms of Rule 19 of the Central Excise Rules, 2002. It has also been held that in terms of Rule 6(6)(v) of the Cenvat Credit Rules, 2004, the provisions of Rule 6(1) and 6(3) are not applicable in respect of excisable goods cleared without payment of duty for export under Bond. In view of this, the orders of Commissioner confirming the duty demand of CENVAT Credit except for Rs. 8,28,20,311/- in Appeal No. E/675/09-Mum and Rs,7,12,75,282/- in Appeal No.E/1190/09-Mum and Rs. 9,36,861/- in Appeal No.E/1182/09-Mum cannot be sustained. Accordingly, we set aside the demands of duty of Rs.4,55,99,931/-, Rs,10,52,45,486/-, Rs.6,63,10,952/- in Appeal No. E/675/09-Mum, Rs. 1,03,58,014/- in Appeal No. E/1060/09-Mum, Rs. 3,81,83,890/- in Appeal No. E/1190/09-Mum, and Rs.82,34,084/- in Appeal No. E/1182/09-Mum. Consequently, we also set aside the order for recovery of interest on the dues. 9. In so far as the demands of Rs.8,28,20,311/- in Appeal No. E/675/09-Mum and Rs.7,12,75,282/- in Appeal No. E/1190/09-Mum are concerned, we find that these demands of CENVA....

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....Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. Malwa Industries reported in 2009 (235) ELT 214(SC). We have perused the judgment which deals with the Notification No. 4/2006-CE dated 1.3.2006 (Sr. No.67) granting exemption from the duty of excise to the finishing agents, dye carriers etc. used in the same factory for the manufacture of textiles and textile articles. Dispute in the cited case was with regard to levy of CVD on imported goods in terms of Notification No.4/2006 at Sr.No. 67 of which finishing agent, dye carriers etc. are exempted if used in the same factory for manufacture of textile articles. The Hon'ble Apex Court held in para 14 of the judgment as under:- "14. The expression "same factory", therefore, in our opinion, would mean the factory where the goods are actually manufactured. It only means that the imported goods are required to be used in the factory belonging to the importer where the manufacturing activity takes place. There is nothing in Section 3 of the Act and in particular the explanation appended to Sub-section (1) thereof mandating actual production or manufacture in the said factory itself. There cannot be any doubt whatsoever ....