TaxTMI 
TaxTMI 
2015 (3) TMI 824
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....11,30,591/- on the ground that the exported goods were fully exempt under Notification No.30/2004-CE dated 9.7.2004 and in view of sub-section (1) of Section 5A of the Act read with CBEC Circular No.937/27/2010-CX dated 26.11.2011 and did not have the option to pay the duty and could not have paid duty. The applicants claim to have filed 12 (twelve) rebate claims totally for Rs. 12,97,367/-. The adjudicating authority held that one claim for Rs. 1,66,776/- [ARE-I No 153/05-06 dated 02.02.2006] had not been received in the office. He further observed that the rebate claim no.4282 dated 22.05.2007 is time barred; the rebate claim no 5650 & 5648 dated 12.06.2007 were already decided vide Order No.1842 dated 19.01.2012; the DGCEI has issued a show cause notice to the applicant as well as processors M/s Agarwal Textile Mills and M/s Swastik Poly Prints Pvt. Ltd., on the ground that the duty for which the rebate claims were filed had been paid out of Cenvat credit availed by the processors on the strength of bogus/fake invoices; the applicant failed to prove the genuineness of the duty payment and veracity of the input stage credit taken by the processors; Chapter sub heading Number of t....
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.... reliance on the confessional statements of the person involved in such a transaction. 3. Being aggrieved by the said orders-in-original, the applicant filed appeals before Commissioner (Appeals) who held that processors had claimed cenvat credit and therefore benefit of Notification No.30/04-CE dated 9.7.04 was not available to them as goods were not exempted from duty. However; the appeals were rejected on the ground that applicant merchant exporter was party to fraudulent availment of cenvat credit on the basis of bogus invoices raised . in the name of bogus grey suppliers & fraudulent payment of duty on exported goodS. 4. Being aggrieved by the said orders-in-appeal, the applicant has filed these revision applications under Section 35EE of Central Excise Act, 1944 before Central Government on the following grounds: 4.1 Grounds in Revision Application No.195/1453/12 (01A No.501 dated 22.8.12): 4.1.1 The applicant submits that the Commissioner (Appeals) have erred in not giving finding on the vital point of law that no notice can be issued after a period of fifteen days from the date of lodging of the claim or at the most within one year from the date of lodging....
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....on between the processors and the merchant exporters are genuine and at arms' length and nothing adverse have been found or brought on record in the show cause notice or adjudication order in the form of evidences either by the adjudicating authority or by the Commissioner (Appeals) and therefore orders passed by the lower authorities without any corroborative evidences or allegations in the show cause notice are not sustainable in law. 4.1.5 The Judgment cited 15jithe Commissioner (Appeals) are not applicable to the facts of the case of the applicant as the applicant have produced ample evidences as regards to the verification of the existence of grey manufacturers in the form of Annexure-p verification and verification made by DGCEI authority who have clearly allowed the said transactions of grey suppliers and export of the goods and no- show cause notices were issued for the said export. 4.1.6 The Applicant submits that the Commissioner (Appeals) have overlooked hundreds of evidences produced before him as regards to re-verification of duty payment certificate as well as verification of grey manufacturer suppliers and therefore, he order passed by the Commissioner (App....
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....w. 4.2.2 The lower authorities have erred in rejecting rebate claims relying upon the statement of the persons whose cross-examination have not been granted to disprove the allegations and to bring facts on record in the form of oral evidences to corroborate that the grey fabrics were supplied by the respective grey manufacturers etc. and therefore the orders passed by the lower authorities solely relying upon the said statements, is in violation of principles of natural justice. 4.2.3 The lower authorities have erred in not accepting the evidences on record that the goods were exported under duty paid documents in the form of Central Excise Invoice issued under Rule 11 by the concerned processors and the said payments were accepted by the revenue in terms of Rule 8 of the Central Excise Rules, 2002 while filing the monthly returns and showing the duty payment for the goods cleared under the respective invoices. The said goods have been exported and therefore there is no cause for rejection of rebate claims. In view of this, the orders of the lower authorities relying upon the evidences which are not material documents are not sustainable in law. 4.2:4 The rower authoritie....
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.... have been filed before Revision Authority Delhi which is the subject matter of present proceedings. 4.3.2 It is submitted that after scanning. of the rebate claims by DGCEI, the remaining rebate claims amounting R.5:12,97,367/- were admissible for rebate claims as the grey suppliers were in existent and were not under Alert Circular and therefore the request was made to Deputy-Commissioner (Rebate), Central Excise, Raigad for sanction of rebate claims. However,' the adjudicating authority vide order dated 23.01.2012 rejected 11 rebate ':clams amounting to Rs..11,30,591/- under Section 11B of the Act and rebate claims amounting to Rs. 1,66,776/- filed under ARE-1 No.153/05-06 dated 02.02.2006 was stated- to be not received in the office of Deputy Commissioner (Rebate), Raigad. Against this order, appeal was preferred to Commissioner (Appeals) who vide order No.501 dated 22.08.2012 rejected the appeal. Against this order, revision application have been filed which is the subject matter of present proceedings., . 4.3.3 It is submitted that this Hon'ble Court have passed order in the case of Akshita Export vide order No. 1370-1371/13-CX dated 11.11.2013 allowing the ....
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....2. They have supplied the copy of duty payment certificates in respect of ARE-1 No. 10 dated 27.04.2006, 14 dated 09.05.2006, 15 dated 09.05.2006 & 19 dated 45.05.2006. It is also submitted that the Deputy Commissioner, Central Excise, Division-V, Surat-I under RTI reply dated 10.02.2012 have stated that duty payment, certificates in respect of export made by KLA Overseas is not traceable in the ;Range Office. Therefore it is not possible to grant inspection of the file or to provide copies of duty payment certificates in respect of export made by Mis. KLA Overseas. It is submitted that duty payment certificates file have been misplaced in the Government department at Raigad as well as at Surat. Since, the applicant had not taken the .option for sealed cover of duty payment certificates to be submitted :along with the claims, certificates were required to be sent directly by the Range Superintendent to rebate- sanctioning authority at Raigad. Since, at both the places, the duty payment certificate file have been found misplaced from their office, the applicant have become handicap for proving the duty paid nature of the goods as the departmental officers are not co-operating on ....
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....nal authority rejected the rebate claim on grounds amongst other grounds that the goods were processed from M/s Agarwal Textile Mills and Mis Swastik Poly Prints Pvt. Ltd. and DGCEI issued a show cause notice to the applicant as well as said two processors for fraudulent availment of cenvat credit by the processor on the strength of bogus/fake invoices of non-existent grey fabric supplier and also that the genuineness of the duty payment on such impugned goods were not available on record. Commissioner (Appeals) while deciding appeal, upheld Order-in-Original w.r.t. ground of the original authority that DGCEI issued Show Cause Notice to the applicant as well as said two processors for fraudulent availment of cenvat credit by the processor on the strength of bogus/fake invoices of non-existent grey fabric suppliers and also that the duty payment certificates of said exported goods were not on record. However, Commissioner (Appeals) did not agree with the other grounds -taken by original authority while deciding the appeal, In case of F.No.195/1453/12-RA (order-in-application No.US/501/RGD/12 dated 22.08.12). Deputy Commissioner, Central Excise (Rebate) Raigad rejecting 11 (eleven) r....
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....e is nexus between. applicant and manufacturer. The applicant had facilitated the wrong availment of cenvat credit by showing purchase/supply of grey fabrics on his account from the non-existent grey suppliers. Under such circumstances, the applicant was party to said fraudulent availrnent of cenvat credit & then payment of duty fraudulently from such credit, on exported goods. As such, applicant was party to said fraudulent availement of cenvat credit and the transaction between - manufacturer and exporter was not bonafide. 8.2 Government observes that the contentions of the applicant that duty was paid on exported goods by issuing invoices under Rule 11 of Central Excise Rules 2002, and foreign remittances towards export sale proceeds were received, do not help them in making them entitled for rebate claim since the said goods were cleared for export by fraudulent payment of duty from wrongly availed cenvat credit as discussed in above para. The said fraudulent payment of duty are only debit entries on paper and no actual duty was paid and applicant was found party to said fraud. Government notes that governing statutory provisions of grant of rebate contained in Rule 18 of Ce....
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....e find that respondent M/s Roman Overseas cannot be denied the benefit of rebate claims. Particularly, when there are no allegations that respondent M/s Roman Overseas either had knowledge or had even failed to take basic care required in law or in general terms to verify that goods were duty paid. 12. The language of Rule 18 however, may pose some question. In particular, it may be contended that Rule 18 envisages rebate for duty paid. Term duty paid as per the department would be duty pail to the Government and not otherwise and when no duty is paid, there can be no rebate. In our views, however Rule 18 also can be looked from this angle. Insofar as respondent M/s Roman Overseas is concerned, it had paid full duty partly by paying duty directly to the Government and partly by availing cenvat credit. To do so, they had made payment of part duty to seller of goods. Insofar as respondent M/s Roman Overseas is concerned, therefore, entire duty is paid by them of which it is claiming rebate of the duty paid on excisable goods upon eventual export. 13. At this stage, we would like to deal with the judgements cited by the counsel for the department. 1) Reliance was placed on de....
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....to the original firms namely M/s Amar Enterprises and M/s Harikrishna Enterprise for recovery of duty and penalty. This would thus show that department is pursuing the original entities for recovery of cenvat credit wrongly claimed whereas on other hand it is denying rebate claim of the manufacturer exporters. We may also notice that against M/s Unique exporters, no proceedings have been initiated, 14.2 We may also record that though counsel for respondent M/s Roman Overseas contended that without cancellation of cenvat credit granted to M/s Unique Exports, rebate claimed by respondent M/s Roman Overseas cannot be raised by respondent M/s Roman Overseas in facts of the present case As already noted, before the competent authority the stand of respondent M/s Roman Oversea was dear that fraud was not disputed, but that respondent M/s Roman Overseas was not part of such fraud and that all reasonable care was taken to ensure that goods were duty paid. 15. Before closing, however, we may reiterate that the facts in present case are peculiar. Had there been any allegations and evidence to show that respondent M/s Roman Overseas was either part of the fraud in nonpayment of excise d....
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....s); and that one claim No.4282w dated 22.5.07 for Rs. 33339/- was submitted after expiry of one year and so it was time barred; that claim in respect of ARE-1 No.153/05-06 dated 2.2.06 for Rs. 166776/- was not received in the office, that rebate claim No.5650 & 5648 dated 12.6.07 for Rs. 75048/- and Rs. 122955/- were already decided vide order-in-original No.1842 dated 19.1.12. The appellate authority has discussed each ground of rejection of rebate claim in his order and dropped most of the said grounds except the grounds of time barred claim, non-payment of duty and non-verification of duty payment particulars. The rebate claim No.4282 dated 22.5.07 in respect of ARE-1 No.19 dated 16.5.06 filed on 22.5.07, after lapse of one year's time limit as stipulated under Section 11B of Central Excise Act was rightly held inadmissible. Similarly the other rebate claim in respect of ARE-1 NO.153 dated 2.2.06 was not received in Central Excise Office and therefore cannot be considered for sanction. 9.2 On perusal of order-in-appeal No.US/501/RGD/12 dated 22.08.12, it has been observed that the appellate authority upheld the Order-in-Original mainly on the grounds that DGCEI investigat....
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....e Bombay High Court's order dated 27.06.2011 in W.P. 3956/10 reported as 2011 (274) ELT 5Q1(BOM) in case of M/s Rainbow Silk wherein the claimant was also .a party to fraud cannot be made applicable to this case. In view of above position, Government noes that in tete cases duty was paid on exported goods from the valid cenvat credit-and lower authorities have erred in giving an erroneous finding of treating the cenvat credit availed in these cases as wrong credit without any basis. The finding of, lower authorities are also contrary to the outcome of DGCEI investigation as discussed above. As such payment of duty on said exported goods cannot be called illegal or irregular since the cenvat credit was availed as per law on the basis of valid duty paying documents issued by genuine existing grey fabrics suppliers. The rebate claims Nos.12849, 21059, 21058, 21995, 21996, 21997, 25562, 25563 as mentioned in order-in-original No.1864/11-12 dated 23.1.12 are to be considered for sanction after verifying the duty payment particulars. The rebate claim No.4282 is rightly rejected as time barred. The other two rebate claims No.5648 and 5650 as mentioned in order-in-original No.1864/11-1....