TaxTMI 
TaxTMI 
2005 (11) TMI 440
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....propriate writ, direction or order, quashing and setting aside the Show Cause Notices at Annexure "C" collectively, which are issued pursuant to the aforesaid Notification No.10/2004-CE (NT) dated 3.6.2004; C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to issue appropriate writ, direction or order, directing the respondents to forthwith sanction the rebate claims filed by the petitioner which are at Annexure "A" collectively and be further pleased to restrain the respondents Nos.2 and 3 from adjudicating the show cause notices at Annexure "C" collectively; D) An ex-parte ad-interim relief in terms of para (C) above may kindly be granted; E) Any other further relief as may be deemed fit in the facts and circumstances of the case may also please be granted; 2. After the petition was admitted vide order dated 11th March, 2005 the same was taken up for hearing as regards interim relief. However, as no order was made Civil Application No.3025 of 2005 came to be moved by the petitioner. The said Civil Application was rejected vide order dated 3rd May, 2005. The petitioner thereupon approached the Apex Court and ....
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....such final products. That by virtue of Rule 19(1) of the Rules an exporter is entitled to export final products without payment of duty after executing the necessary bond in this regard and under sub-rule (2) of Rule 19 of the Rules any material which is used in the manufacturing or processing of goods i.e. final products which are exported can also be removed without payment of duty. He, therefore, urged that both under sub-rule (1) and sub-rule (2) of Rule 19 of the Rules an exporter has the option to seek exportation of final products or removal of inputs without payment of duty, but in the event an exporter exercises option only qua one or the other sub-rule and claims rebate under Rule 18 qua the final products the provisions, as they stand, permit such a course of action. But by virtue of the Amendment Notification dated 3rd June, 2005 the option available with an exporter is taken away and the exporter who opts to remove the inputs without payment of duty is forced to export the final products also without payment of duty, even though the exporter is entitled to claim rebate under Rule 18 in relation to the duty paid on such final products. He, therefore, urged that the said....
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....hearing that even if, the respondent authority has not established that the petitioner has in fact availed of any double deduction, the matter was at the stage of show cause notice, and in the circumstances after the petitioner tenders its reply, is heard and adjudication process is undertaken, that the facts can come on record, whether in fact the petitioner has derived double benefit or not. He, therefore, submitted that the respondent authority be permitted to proceed with the proceedings in pursuance of the show cause notices. 9. Rules 18 and 19 of the Rules read as under: Rule 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. - "Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft. Rule 19. Export without payment of duty.-- ....
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....nces, that in a case where an exporter exercises option under sub-rule (2) of Rule 19 of the Rules in relation to inputs, which may be duty free, or which are removed without payment of duty on execution of bond, when used for the purposes of manufacture or processing of final products which are exported, the exporter must export the goods only under Rule 19(1) of the Rules is not borne out by the provisions of the Rules. 13. In a case where the final product itself is liable to duty and the exporter, on clearance of such goods for export, makes a claim for rebate on payment of duty at the time of clearance, cannot be prevented from doing so on the specious plea that the inputs used in manufacture of such final products were procured without payment of duty. There is no rationale for such course of action apart from the fact that, as stated hereinbefore, the relevant Rules do not envisage any such requirement. The statement made on oath in the affidavit-in-reply by respondent No.2 that in such an eventuality an exporter would get double benefit is not supported by a plain reading of the provisions of the Rules. Nor has anything been brought on record to substantiate the aforesai....
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....llment of certain conditions and subject to certain procedural safeguards, CBEC cannot be permitted to render the Notification issued by the Central Government redundant by issuing a notification in exercise of powers under Rule 19 of the Rules. Nor can CBEC exercise such powers so as to render Rule 18 otiose. Hence, for this reason also, the impugned Notification cannot be upheld. 17. The contention raised on the basis of Rule 5 of CENVAT Rules is not well founded. Even if, for the sake of argument, the stand of the Revenue is accepted and the Notification is upheld, all that would happen is that the petitioner in spite of becoming entitled to rebate under Rule 18 of the Rules would have to make a claim for refund under Rule 5 of the CENVAT Rules. This position becomes amply clear when one reads the later portion of Rule 5 of the CENVAT Rules which stipulates "and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount" subject to the conditions, safeguards, etc. as may be notified. In these circumstances, the entire action of issuing the Notification appears to be misdirected as the same is revenue neutral. In case of an ex....