TaxTMI 
TaxTMI 
2017 (11) TMI 1520
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....al Excise (Appeals). 2. The petitioners are engaged inter alia in the manufacture of biscuits, confectionery and wheat flour falling under Chapter 11, 17 and 19 of the Central Excise Tariff Act, 1985 at their factory situated at Vile Parle (East), Mumbai which held central excise registration producing for home consumption as well as for exports. Apart from manufacturing biscuits themselves, the petitioners would get biscuits manufactured from other Contract Manufacturing Units ('CMUs') across India in terms of Notification no 36/2001-CE(NT) dated 26th June, 2001 ("Notification 36"). The goods manufactured by the CMUs would be brought into the petitioners factory and stuffed into containers along with goods manufactured at their own factory and thereafter cleared for export. 3. It is the petitioners case, as canvassed by Mr. Patil learned counsel, that the customs authorities had permitted the stuffing of goods manufactured by other CMUs as well in their factory. It is submitted that in view of the rising transaction costs of exports, the petitioner shifted their export activities to the premises of M/s. Bunty Foods Pvt. Ltd.("BFPL") with effect from September, 2004. ....
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....for a total amount of duty of Rs. 25,72,908/- under rule 18 of the Central Excise Rules 2002 read with Notification No. 41/2001-CE(NT) dated 26th June, 2001(Notification 41) and Notification No. 19/2004-CE(NT) dated 6th September, 2004 (Notification 19). 6. They contended that the Central Excise Manual of Supplementary Instructions of clause (ii) of Part I of Chapter 8 provided general permission where co-relation of goods and duty paid character was possible. They contended that the goods were received under duty paid excise invoices in original factory packed condition bearing identification marks such as running package numbers appearing on the boxes of the biscuits and confectioneries which are reflected in the excise invoices accompanying the goods co-relating the export goods. They contended that some of the biscuits were brought in by CMUs from their own factories and were not manufactured at BFPL where the goods were stuffed and exported. The goods from factory of BFPL were duty paid biscuits received under Rule 16(1) and (2) of the Central Excise Rules, 2002 and were cleared as such after payment of excise duty equal to credit taken and hence eligible for rebate of duty....
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.... order passed by the Commissioner (Appeals ) at Exhibit Q to the petition and contended that the observation in the Order that the petitioners had connived with BFPL and arrived at modus operandi whereby payment wrongly claimed was not justified. BFPL had obtained permission vide letter dated 26th May, 2004 from the Commissioner of Central Excise, Thane under rule 16(3). The Order proceeds on the basis that no such permission had been granted and goods were not exported directly from the factory of the manufacturer in terms of Notification No. 41. The order further records that an adjudicating authority had observed that BFPL had cleared the goods for exports but after reversing the amount CENVAT credit availed. The reversal of an amount in terms of Rule 3(4) of the Cenvat Credit Rules 2002 was not "duty" for which rebate could be sanctioned as per explanation (1) to Notification 41. The impugned order incorrectly holds that BFPL had deliberately not disclosed the name of the manufacturer in the relevant ARE to avoid detection by the Central Excise Officer. 11. According to Mr. Patil, the appellant had got excisable good manufactured at various job workers under Rule 16(1) and (....
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....ods and their duty paid character, the Central Excise Officers would be required to verify proof of payment of duty. As an example of identifiable goods reference was made to two wheelers and the fact that each unit is marked with a unique engine number and chassis number which would make possible to identify goods exported and the duty paid thereon. It is submitted that the exported packages of biscuits would also qualify as goods that were easily identifiable. 13. A query was put to Mr. Patil as to how the biscuits exported could be said to be easily identifiable, in view of the fact that the biscuits do not contain any specific number or identification mark. To this, Mr. Patil submitted that the bulk sealed packages containing biscuits had specifically identifiable shipping numbers and will qualify for claiming benefit of a notification. Mr. Patil further submitted that an accepted fact that in case the exporters submitted the proof of actual export with the satisfaction of the rebate sanctioning authority and when the goods are clearly identifiable and co-relatable with the goods cleared from the factory on payment of duty, the condition of exports being made directly from t....
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....ic reference was made to the shipping marks appearing in each of the invoices entabulated above. That apart, description of the contents of the packages is shown as Parle biscuits of various kinds. Thus, it is submitted by Mr. Patil there can be no doubt of what was exported. In this manner, Mr. Patil demonstrated that clearly identifiable packages were dispatched and the petitioner was well within its right to claim benefit of the subject notification. 16. Mr. Patil further submitted that declarations executed by BFPL under rule 16 established receipt of excisable goods in packages with duly identifiable shipping marks. He submitted that all these were conveniently co-relatable and there can be no doubt whatsoever that their goods referred under the invoices were the very goods that were sent to BFPL received at BFPL and stuffed into containers are BFPL premises at Ambernath. He submitted that the declarations by BFPL clearly set out the fact that Commissioner of Central Excise had given permission for export clearance on 26th May, 2004 and accordingly goods were cleared and export. He submitted that even otherwise a general permission was always there in order to export the go....
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....L and the finished goods were then cleared for export from BFPL. He submitted that the petitioner had not fulfilled the conditions laid down in the notification no.19/2004-CE(NT) as amended since they failed to export the goods directly from the factory of manufacturer and did not observe procedure in Circular no.294/10/1997-CX. In view of the same, the petitioner was issued show cause notice on 27th December, 2007 to which the petitioner replied to the Assistant Commissioner rejected the rebate claim since the excisable goods were not exported directly from the factory of the manufacturer which is a condition precedent as per notification no.19/2004 and the board circulars referred to above. If the export was not to effected from the factory of the manufacture it could only be done after obtaining permission from the Central Board of Excise and Customs ('CBEC' ). In the instant case, the petitioner had not obtained such permission. It is submitted that these goods were being exported from BFPL premises without any process being carried out after reversal of the CENVAT credit so availed and although prescribed in Rule 16(1) and (2) of the Rules. The Chief Commissioner of Ce....
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....ce of invoices, filing of the declarations, declaration form ARE-1 and till handing over the consignment for export to the ocean line and as reflected on the Bill of Lading. We do not find any infirmity on that aspect of the matter and for that reason Mr. Bangur contention that the goods were not clearly identifiable and therefore not entitled to benefit of the notification cannot be accepted. 21. In the course of submissions, we had called upon Mr. Patil to show us the permission has been granted under Rule 16(3). In this respect, he submitted that the permission had been granted vide letter dated 26th May, 2004. He invited our attention to Exhibit J to the petition which is a communication from the Commissioner of Central Excise to BFPL. He contended that this was a permission granted for stuffing of container those and which was referred to in the declaration in the remarks column. For ease of reference the contents of the said letter purporting to be the permission is reproduced below:- --------------------------------- "I am directed to your letter dated 4.3.2004 on the above subject. In this connection reference is invited to the discussions held with you on 5.4.2....