TaxTMI 
TaxTMI 
2015 (3) TMI 821
X X X X Extracts X X X X
X X X X Extracts X X X X
....8-305/2010(Ahd-II)CE/CMC/Commr(A)/Ahd 31-12-2010 31-47 195/393-409/11-RA 37-53/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 31-1-2011 48-63 195/467-482/11-RA 71-86/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 28-2-2011 64-68 195/518-522/11-RA 110-114/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 31-3-2011 69-92 195/674-697/11-RA 263-286/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 10-8-2011 93-113 195/698-718/11-RA 197-217/2011(Ahd-II)CE/PKJ/Commr(A)/Ahd 19-7-2011 114-121 195/719-726/11-RA 141-148/2011(Ahd-II)CE/PKJ/Commr(A)/Ahd 16-6-2011 122-123 195/135-136/12-RA 363-364/2011(Ahd-II)CE/PKJ/Commr(A)/Ahd 5-12-2011 124-130 195/165-171/12-RA 32-48/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 31-1-2012 131-140 195/408-417/12-RA 74-83/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 14-3-2012 141-159 195/541-559/12-RA 85-103/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 14-3-2012 160-162 195/560-562/12-RA 142-144/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 17-4-2012 163-178 195/563-578/12-RA 117-132/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 30-3-2012 179-188 195/739-748/12-RA 32-48/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 31-3-2012 2. Briefly stated the facts of the cases are that applican....
X X X X Extracts X X X X
X X X X Extracts X X X X
....44 before Central Government on the following common grounds : 4.1 So far as it relates to the admissibility of rebate claim of Central Excise Duty paid at the rate of 10.30% on export goods under serial Entry No. 21 of the table to Notification No. 2/2008-C.E., dated 1-3-2008 the authorities have erred in sanctioning rebate claim of duty rate 4.12% under serial Entry No. 62-C of the table to Notification No. 4/2006-C.E., dated 1-3-2006. 4.2 It is a question of fact that as per Sr. Entry No. 62-C of the Table, to the Notification, 4/2006-C.E., dated 1-3-2006, Medicaments of Heading 3004 of the First Schedule to the said Tariff Act, are assessable under MRP Based Valuation under Section 4A of the Central Excise Act, at the total Central Excise Duty rate of 4.12%, the said Tariff Notification, has been issued by the Central Government, under Section 5A(1) of the Central Excise Act and has been approved by the Indian Parliament. 4.3 The applicants, now prefer to refer to Sr. Entry No. 21 of the Table, to the Notification 2/2008-C.E., dated 1-3-2008, whereunder, the same medicaments of Heading 3004 of the First Schedule to the said Tariff Act, are assessable to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4.7 Attention is invited to Circular/Trade No. 795/28/2004-CX, dated 28-7-2004 issued by the Central Board of Excise & Customs, which is in favour of the applicants. The Circular No. 937/27/2010-CX, dated 26-11-2010 already stands overruled by the decision of the Hon'ble CESTAT, Tribunal in the case, titled as HYVA (India) Pvt. Ltd. v. CCE, Belapur - 2010-TIOL-1410-CESTAT-MUM. 4.8 The Central Excise Duty, as per Sl. Entry No. 84 of the List I of Union List of the 7th Schedule to the Constitution of India is leviable on the goods, manufactured or produced in India and therefore, it is a tax, on the activity, called as, manufacture of goods, such goods, called as, excisable goods, specified in the Schedule to the Central Excise Tariff Act, 1985, read with, Section 2(d) of the Central Excise Act, 1944 and accordingly, Central Excise Duty is payable by the manufacturer on the excisable goods, produced by him, even when supplied as free goods or free samples and under the Central Excise Law, sale or purchase or payment for goods, is all immaterial and once Central Excise Duty is paid, even on free goods, which are exported, rebate is to be sanctioned. 4.9 It is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of postal authorities and the circumstances beyond their control. Government finds that there are genuine reasons for said delay which is too within condonable limit. Hence, Government in exercise of powers vested in it under Section 35EE of Central Excise Act, 1944 condones the delay and takes up the revision applications for decision on merit. Since a similar issue is involved in all these revision applications, these are taken up together for decision by this common order. 8. On perusal of records, it is observed that applicant exporter has cleared export goods on payment of duty (BED) @ 10% in terms of Notification No. 2/2008-C.E., dated 1-3-2008 as amended, whereas they were clearing goods for home consumption on payment of duty (BED) @ 4% in terms of Notification No. 4/2006-C.E., dated 1-3-2006 as amended. Prior to the Budget, 2010, applicants were also clearing the export goods on payment of duty @ 4% in terms of Notification No. 4/2006-C.E., dated 1-3-2006 as amended, but after Budget 2010, they started paying duty on export clearances at 10% under Notification 2/2008-C.E., dated 1-3-2008 as amended and filed rebate claims under Rule 18 of Central Excise Rules, 2002....
X X X X Extracts X X X X
X X X X Extracts X X X X
....otification was amended by Notification No. 58/2008-C.E., dated 7-12-2008 reducing the said general rate from 14% to 10%. Vide Notification No. 4/2009-C.E., dated 24-2-2009, said Notification 2/2008-C.E., was further amended to reduce the general rate of duty from 10% to 8%. Finally the Notification No. 2/2008-C.E., was amended by Notification No. 6/2010-C.E., dated 27-2-2010 to enhance the said general rate of duty from 8% to 10%. Pharmaceutical drugs and medicines falling under Chapter 30 of First Schedule to Central Excise Tariff Act, 1985 covered under serial entry No. 21 of table to Notification No. 2/2008-C.E., dated 1-3-2008 as amended, attracted general tariff rate of duty @ 10%. At the same time the Notification No. 4/2006-C.E., dated 1-3-2006 providing for effective Nil rate of duty was amended vide Notification No. 4/2008-C.E., dated 1-3-2008 by inserting Sr. Nos. 62A, 62B, 62C, 62D & 62E for CETH 3001, 3003, 3004, 3005 & 3006 (except 3006.60 & 3006.92) prescribing effective rate of duty @ 8%. Even in Joint Secretary (TRU) DO Letter F. No. 334/1/2008-TRU, dated 29-2-2008, it was clearly stated that the excise duty on drugs and pharmaceutical products falling under Centra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty, which is not allowed in TRU letter. Here basically the issue involved is whether rebates of duty paid at tariff rate or effective rate is to be allowed and not exactly regarding applicability of two notifications for payment of duty. 10.3 It is felt that it is necessary to go into background to find out the reason behind the issue of these two notifications. Notification No. 4/2006-C.E., dated 1-3-2006 when issued, originally did not prescribe any concessional rate of duty to medicaments of Chapter Heading 3004 and a concessional rate of duty @ 8% was prescribed by amending the said notification vide Notification No. 4/2008-C.E., dated 1-3-2008 and the same was further reduced to 4% vide amending the said notification vide Notification No. 58/2008-C.E., dated 7-12-2008. On the other hand, the tariff rate of duty for the Chapter heading 3004 was 16% adv. However subsequently reduction in general tariff rate of duty was effected as under : The Hon'ble Finance Minister in his speech while presenting the Union Budget for 2008-09 in the Parliament stated that :- "PART-B VIII. Proposals Tax "Para 144. The manufacturing sector is the backbone of any econo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation warrants caution. Therefore, I propose to partially roll back the rate reduction in Central Excise Duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad valorem." From above, it is noted that intention of Legislature behind said two notifications is best revealed in the above said budget speeches of Hon'ble Finance Minister. It is quite clear that Notification No. 2/2008-C.E., dated 1-3-2008 (14%) and subsequent amending Notification No. 58/2008-C.E., dated 7-12-2008 (10%), 4/2009-C.E., dated 24-2-2009 (8%) and 6/2010-C.E., dated 27-2-2010 (10%), were issued to reduce/alter the general tariff rate of duty. 10.4 Government notes that lower authorities have relied upon Para 4.1 of Part-I of Chapter 8 of C.B.E. & C. Excise Manual on Supplementary Instructions which is extracted as under :- "4. Sealing of goods and examination at place of dispatch. 4.1 The exporter is required to prepare five copies of application in the Form ARE-1, as per format specified in the Annexure-14 to Notification No. 19/2004-Central Excise (N.T.), dated 6-9-2004 (See Part 7). The goods shall be assessed to duty in the same manner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out through Finance Bill/Act. Government, therefore is of the view that duty was payable @ 4% on the export goods also and rebate cannot be granted on the duty paid in excess of effective rate prescribed in the Notification No. 4/2006-C.E., dated 1-3-2006 as amended, as stipulated in the above said C.B.E. & C. Instructions. 10.5 Further, it is also noticed that applicants are clearing goods for home consumption on payment of duty @ 4% in terms of Notification No. 4/2006-C.E. as amended. The above said C.B.E. & C. Instructions state that export goods are to be assessed in the same manner as the goods for home consumption. So, applicant has to assess all goods whether cleared for export or home consumption in the same manner. He cannot assess export goods at higher rate of duty @ 10% and goods cleared for home consumption at lower rate of duty @ 4%. He has to choose any one notification and assess all clearance of goods in the same manner even if there are two effective rates of duty as per two notifications. In this case, the situation is different since Notification No. 2/2008-C.E., as amended prescribed duty at General Tariff rate of 10% whereas effective rate of duty is 4....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng of rebate claims in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 of the duty paid either at general tariff rate or at the effective rate. The cited case laws mainly relate to admissibility of exemption notification benefit in case of dispute of classification/eligibility of claimant. None of the said judgments are on the issue of sanctioning rebate of duty paid on exported goods. For applicability of the cited precedents "Government is of the opinion which is guided by the observations of Hon'ble Supreme Court in Para 10 of the judgment in case of Escorts Ltd. v. CCE, Delhi-II - 2004 (173) E.L.T. 113 (S.C.) observed, inter alia, that "one additional or different fact may make a word of difference between conclusion of two cases", and in para 11 further inferred as follows : "11. The following words of Lord Denning in the matter of applying precedents have become locus classicus :- "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect -" Therefore, there cannot be any strict statutory....
X X X X Extracts X X X X
X X X X Extracts X X X X
....30/2004-C.E. both dated 9-7-2004 prescribing duty @ 4% and nil respectively. Hon'ble High Court has upheld the Government of India Revision Order upholding the order of original authority. In this case, original authority had allowed rebate of duty paid at effective rate of 4% and allowed re-credit of balance amount in the Cenvat credit account of assessee. 10.9 Applicants have relied upon C.B.E. & C. Circular No. 795/28/2004-CX, dated 28-7-2004 and 937/27/2010-CX, dated 26-11-2010 in support of their claim that they can avail both the notifications. In this regard, Government observes that subsequent to Budget, 2004 number of changes were made in the excise duty structure on Textiles and Textile Articles. Regarding issue No. 1, C.B.E. & C. clarified in Circular No. 795/28/2004-CX, dated 28-7-2004 as under : "Issue No. 1 : Can a manufacture of Textiles or Textile articles avail full exemption under No. 30/04-C.E., dated 9-7-2004 as well as clear similar or dissimilar goods on payment of duty under Notification No. 29/2004-C.E., dated 9-7-2004 simultaneously? Clarification : Notification No. 29/2004-C.E. (prescribing optional duty at the rates of 4% for pure c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that lower authorities are legally right in holding that duty was payable @ 4% in terms of exemption Notification No. 4/2006-C.E., dated 1-3-2006 as amended and rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% in terms of Notification No. 4/2006-C.E., dated 1-3-2006. 12. Applicant has contended that rebate of duty paid cannot be denied on the goods supplied free as samples. The free sample has no commercial value as they are supplied free to the buyer and no foreign remittance is received. As per Condition 2(e) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 if the market price of the excisable goods at the time of exportation is less than amount of rebate claimed, the rebate will not be admissible since the goods are supplied free and therefore rebate on such goods is rightly denied under Rule 18 of Central Excise Rules, read with Notification 19/2004-C.E. (N.T.), dated 6-9-2004. However, the amount paid as duty may be allowed to be re-credited to their Cenvat credit account as the said amount cannot be retained by Government without any authority of law. 13. Applicant has also contested the decision of lower autho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ermination of Price of Excisable Goods) Rules, 2000 is also relevant which is reproduced below :- "Rule 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal up to the place of delivery of such excisable goods. Explanation 1. - "Cost of transportation" includes - (i) The actual cost of transportation; and (ii) In case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purpose of determining the value of the excisable goods." 13.5 Government observes that from the perusal of above provisions i....
X X X X Extracts X X X X
X X X X Extracts X X X X
............................. (ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole or in part." The said provisions of this notification clearly stipulate that after examining the rebate claim, the rebate sanctioning authority will sanction the claim in whole or in part as the case may be depending on facts of the case. Government notes that said notification issued under Rule 18 of Central Excise Rules, 2002, prescribes the conditions, limitations and procedure to be following for claiming as well as sanctioning rebate claims of duty paid on exported goods. The satisfaction of rebate sanctioning authority requires that rebate claim as per the relevant statutory provisions is in order. He does not h....