2017 (9) TMI 694

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....t is that since the goods were cleared under Notification 34/2006-CE without payment of duty they are liable to pay 10% of the value of the goods as exempted goods in terms of Rule 6 of Cenvat Credit Rules, 2004. Accordingly the adjudicating authority has confirmed the demand under Rule 14 of the Cenvat Credit Rules, 2004. Being aggrieved by the said order, the respondent filed appeal before the Commissioner (Appeals) who allowed the appeal considering para 3.6.4.10 of Foreign Trade Policy, 2004-09. According to which the holder of the SFIS certificate is allowed to pay duty from the duty credit scrip under SFIS. Therefore he held that the supply of the goods by the respondent is not exempted goods. Aggrieved by the order, Revenue filed thi....

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....ng to which the manufacturer is allowed to clear the goods without payment of duty and the duty payable on such goods is debited from the SFIS Scrip by the recipient of the goods. In this position it cannot be said that the goods cleared by the respondent is exempted. This gets clear from paragraph 3.6.4.10 of the Foreign Trade Policy which reads as below: "Utilisation of duty credit scrip shall be permitted for payment of excise duty in terms of DOR notification issued for procurement from the domestic sources as items permitted under para 3.6.4.5" 5.1 As per this para 3.6.4.5 of Foreign Trade Policy, the goods supplied by the respondent is not exempted as duty was admittedly debited by the recipient of the goods. Very same issue has....

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...., 2002, and the said debits are considered as discharge of duty liability and once the proof of export is produced, the amounts debited are recredited. It can be seen from the above reproduced clarification that the CBEC specifically mentioned the conditions that has to be performed by the jurisdictional Central Excise Officer of the assessees from where goods are cleared under SFIS. The CBEC circular also very specifically clarifies that the original certificate has to be produced before the jurisdictional Central Excise Officer for debiting the duties of excise leviable on the goods. The wordings of notification and subsequent CBEC Circular, would make it clear that the duty liability which has been debited in the SFIS scrip, wou....