TaxTMI 
TaxTMI 
2012 (12) TMI 977
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....rought entire Textile Industry within the purview of levy of Excise duty. The same was continued upto 8-7-2004 and with effect from 9-7-2004 the Government of India introduced Dual System in Textile industry i.e. Dutiable scheme under Notification No. 29/2004-C.E., dated 9-7-2004 (with Input Cenvat Credit) and exemption scheme under Notification No. 30/2004-C.E., dated 9-7-2004 (without input stage credit). Government also issued Circular No. 795/28/2004-CX., dated 28-7-2004 and clarified that Textile unit can avail both the Notifications simultaneously. Accordingly, the applicants opted for exemption scheme of Notification No. 30/2004-C.E., dated 9-7-2004 for clearances to Home Consumption (Local clearances) and dutiable scheme of Notification No. 29/2004-C.E., dated 9-7-2004 for Export clearances made under DEPB Scheme where Refund/Rebate of Input credit is permissible. They had filed 8 (eight) rebate claims under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 collectively for Rs. 12,29,120/-. The said claims were sanctioned by the Assistant Commissioner (Rebate), Central Excise, Raigad vide order dated 5-7-2010. 2.1&em....
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.... 195/1216/11 pertaining to 1st Order-in-Appeal at (i) above :- 4.1.1 The Commissioner (Appeals), Mumbai-II has illegally relied upon the provision of sub-section (1A) of Section 5A of Central Excise Act, 1944 and C.B.E. & C. Circular No. 937/27/2010-CX., dated 26-11-2010 which are not applicable in applicants case. It is stated that by issue of Circular No. 937/27/2010-CX, dated 26-11-2010 the C.B.E. & C. correctly interpreted the provisions of sub-section (1A) of Section 5A by clarifying that assessee cannot opt to pay duty under Notification No. 59/2008-C.E., dated 7-12-2008 with availment of credit on inputs and has to opt for full exemption provided under Notification No. 29/2004-C.E., dated 9-7-2004 in terms of restriction under sub-section (1A) of Section 5A which stipulates that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty excise leviable thereon has been granted absolutely then the manufacture of such excisable goods shall not pay the duty of excise on such goods. The applicants say and submit that the clarifications provided by the C.B.E. & C. under the above referred circular is with regards to existence of ....
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....ontinued as of date also. 4.1.3 The Commissioner (Appeals) has not recorded any documentary evidence submitted by the applicants along with the cross-objection and separately along with P.H. Synopsis dated 2-3-2011. The applicants submitted documentary evidence to prove that they availed the credits on inputs used for manufacture and exportation of PTY. The applicants also submitted copy of subsequent Order-in-Original passed by the respondents sanctioning further rebate claim after getting full report of factual position from range Supdt. of Central Excise. The Commissioner (Appeals) neither recorded nor gave any findings. Further more, the Commissioner (Appeals) also did not record the PH proceedings took place prior to 22-6-2011. It is available on the records that applicants Advocate appeared for PH on 10-12-2010 and thereafter also submitted PH Synopsis, dated 2-3-2011 when the PH was fixed on 2-3-2011. This, the impugned order passed by the Commissioner (Appeals) is also in gross violation in principles of natural justice. Further, the applicants say and submit that the identical disputed issue is also decided by revisionary authority in the matter of Inter-globe serv....
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....ication and therefore no duty was required to be paid on export clearances. The department never disputed about the availment of credit on inputs and duty paid character of goods exported. The Commissioner (Appeals), Mumbai-II altogether made out a new case about alleged non-maintenance of separate record and illegally upheld the Order-in-Original. 4.2.3 That the clarifications provided by the C.B.E. & C. under the Circular No. 937/27/2010-CX., dated 26-11-2010 is with regards to existence of two Notifications where 4% duty was prescribed on 100% cotton fabrics under Notification No. 59/2008-C.E. and for the same item Nil rate without any condition (absolute exemption) was prescribed under Notification No. 29/2004-C.E., dated 9-7-2004. As per sub-section (1A) of Section 5A the assessee has to compulsorily opt for absolute exemption Notification and accordingly, the clarification issued by C.B.E. & C. is correct and legal. In the instant case, the said clarification has no applicability being there is no involvement of any absolute exemption Notification. The Notification No. 30/2004-C.E., dated 9-7-2004 is subject to condition that no input credit is availed. Wherever input....
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....oner (Appeals) has corrected himself and similar rebates claims of Rs. 4.75 crores were allowed without any objection for which payments have already been received. A request for a common decision for both the above files was also made. Nobody attended hearing on behalf of the respondent department. 6. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. Government has taken up both the cases for decision by this common order as the issue involved in both the cases is same. 7. In respect of 1st revision application F. No. 195/1218/11 pertaining to case at (i) above, Government observes that applicant exported the goods on payment of duty under claim of rebate under Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. The applicant was clearing goods by availing exemption Notification No. 29/2004-C.E. and 30/2004-C.E. simultaneously. The jurisdictional Commissioner has observed that the applicant failed to draw clear distinction between two aforesaid notifications inasmuch as they could not substantially prove that the goods exported have been manufactured....
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..../28/2004-CX., dated 28-7-2004 :- Issue No (1) : Can a manufacturer of textiles or textile articles avail full exemption under notification no. 30/2004-C.E. as well as clear similar or dissimilar goods on payment of duty under notification no. 29/2004-C.E. simultaneously? Clarification : Notification No. 29/2004-C.E. (prescribing optional duty at the rates of 4% for pure cotton goods and 8% for other goods) and no. 30/2004-C.E. (prescribing full exemption) are independent notifications and there is no restriction on availing both simultaneously. However, the manufacturer should maintain separate books of account for goods availing of notification no. 29/2004-C.E. and for goods availing of notification no. 30/2004-C.E. (ii) Circular No. 845/3/2007-CX., dated 1-2-2007 :- However, it is seen that textile manufacturers/processors have to use common inputs, which are used in a continuous manner, and it may not be practically possible to segregate and store inputs like dyes and chemicals separately or maintain separate accounts. In such cases, in order to facilitate simultaneous availment of the two notifications, such manufacturers may be advised not to take credit initi....
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....e of duty of 4% in Notification No. 29/2004-C.E., dated 9-7-2004. Subsequently, the Board issued another Circular No. 940/1/2011-CX., dated 14-1-2011 which further clarified that "the manufacturer cannot opt to pay the duty in respect of unconditionally fully exempted goods and he cannot avail the Cenvat credit of the duty paid on inputs. 9.1 In the present case the Notification No. 30/2004-C.E., dated 9-7-2004 is a conditional notification. The proviso as at para 8 above unambiguously states that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs had been taken under the provisions of Cenvat Credit Rules, 2004. The applicants had in fact taken Cenvat credit on inputs used in the manufacture of exported goods as declared on the ARE-1's and had cleared the goods on payment of duty. When the condition of the notification was not satisfied, there was no way the applicants could have availed exemption under Notification No. 30/2004-C.E., dated 9-7-2004. 9.2 Now when harmonious and systematic perusal for proper applicability, notwithstanding applicability of any other circular, it can be seen that Circular No. 795....