TaxTMI 
TaxTMI 
2003 (7) TMI 99
X X X X Extracts X X X X
X X X X Extracts X X X X
....preparing the AR-5's and ARE 2, etc., but was not actually exporting the goods by himself. The export was made by M/s. IKEA Trading (India) Ltd., New Delhi, as seen from Shipping Bills and Mate receipt. (3) Name of M/s. IKEA Trading (India) Ltd., was not mentioned on the said AR-5/ARE-2 and no disclaimer certificate was given on the same. Therefore a personal hearing was given to the exporter to clarify the above-mentioned issues, on the basis of which Deputy Commissioner, Central Excise, Division F-1, Mumbai-I, vide Order-in-Original No. F-1/3/2002, dated 4-2-2002 rejected the above said rebate claims, while making the following observations. (1) The exporter neither manufactured nor exported the goods in question. Procedure laid down by Trade Notice No. 45/2001 and Rule 18 of Central Excise Rules, 2001 was also not followed by the exporter. (2) With reference to the goods manufactured from fabrics received under Invoice No. 78/08-04-2001, it is seen that the description of fabrics used in the exported goods are different from the fabrics actual....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egarding the issue of disclaimer to be given on the body of the AR-5/ARE-2 by the merchant-exporter or the manufacturer, there is no column prescribed for the same in the AR-5/ARE-2. Commissioner (Appeals) has also stated that in view of Circular No. 602/39/2001-CX, dated 21-11-2001 any procedural irregularity, inter alia non-reference of the name of M/s. IKEA Trading (India) Ltd. on the subject AR5/ARE-2 is waived, since the fabrics for duty paid and made-ups were duly exported. 3.Against this order, the Commissioner (A), the present Revision Application is filed on the following grounds :- (1) M/s. Creative Mobus Fabrics Ltd. are neither exporter nor manufacturers and it is evident from the Shipping bills submitted by them. (2) CBEC Circular No. 81/81/94-CX, dated 25-11-94 makes a requirement that the disclaimer certificate should be given in favour of the exporter on the AR-4, in the instant case there is no such disclaimer certificate given on the body of the aforesaid document, which is in contravention of the above-mentioned Circular. (3) I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k basis. These processors do the job work as directed by them and on labour cost basis only, the fabrics belong to them and they are the manufacturers and owners of these fabrics. After the required process these fabrics are sent to another job worker for further process of converting these fabrics into bed sheets and pillow covers i.e. made ups as it is commonly known in trade parlance. This process is also carried out by the job worker as per their directions and supervision on labour charges basis at mutually agreed cost. At no point of time does the ownership of the fabrics pass on to any of the job workers, the fabrics and the made ups remain their goods and the Central Excise Duty as paid by these job workers is paid on their behalf and is charged to their account. These processes are done by the job workers on contractual basis and these units are merely processors of the fabric in question and they are the manufacturers of these fabrics. From the premises of the made up converter the goods in question are subsequently sought to be exported under the Central Excise Procedure and in conformity of the Central Excise Act and the Rules made thereunder and under the physical supe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or had cleared the goods in question under Central Excise Invoice No. 78, dated 8-4-2001. This is a hand written invoice prepared by a clerk of the processing unit. In the column of the description of the goods, the word, in a running hand "sht ng" width 153 cms is written and that too is not very clearly written it is appearing as mentioned above. The width of the fabric is clearly written it is appearing as mentioned above. The width of the fabric is clearly written as '153 cms'. This the ld. Appellant is wishing to read it as if the description of the fabrics is written as "shirting" and that the said fabric is meant for manufacture of 'shirts' and cannot be used for manufacture of any other made ups. This is only an unilateral assumption on the part of the ld. Appellant. This cannot and should not be a basis of a deliberate misinformation so as to change the end use of the fabric. The correct reading of the description should be read as "sheeting" and not "shirting". In fact there are many invoices of the same processor wherein the writing is of the same clerk who has written this invoice No. 78; in all other invoices, the description is reads "sheeting" and the same has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer who passed the order-in-original, would have rendered the Rebate claim in perfect order. This then is clearly accepted by the Dept. as a mere procedural lapse. The procedural lapse has been waived by the ld. Commr. (Appeals) in his order-in-appeal. This waiver has not been challenged in the present R.A. and is thus legally accepted as correct. (h) The benefit of rebate is on account of the export of the goods and not on the account of the person exporting the goods. Therefore the rebate can be sanctioned either to the manufacturer (which would include the 'supporting manufacturer') or the exporter. Herein the said merchant-manufacturer has given a disclaimer certificate in favour which is perfectly legal and the rebate claims is rightly to be sanctioned to them, also since these are the only claimant in this issue. (i) That in this case, the fabrics in question from the processor's factory premises are directly consigned to the converter's premises (M/s. Kamal Trades) in a packed condition with distinct markings for identification of the bales/packages. On being received in premises....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the converter for verification and after due diligence and the required checks and safeguards, the said Officers seal he packages with their C. Ex. Official seal and sign on the back of the said documents with their dated signature. That the whole process is carried out under direct control and supervision of the Central Excise Officers. These sealed packages are directly carted away to the Customs area for onward shipment overseas. (j) That in this case, there is no dispute - (i) that the goods in question have been exported out of the country; (ii) that the fabrics cleared after processing are directly consigned to the made up article manufacturer; (iii) that the processor of the fabrics has paid the central excise duty on the goods; (iv) that the processor has raised job charges bills on them plus the central excise duty as paid by the said job worker on their behalf; (v) that they have paid the job ch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jection is the Respondents are neither manufacturers nor exporters of the impugned goods. In this regard, the Respondents contend that, they purchase cotton yarns from various manufacturers/dealers and weave cotton fabrics at their own weaving unit situated in Vapi, and also at times, they get the fabrics woven on their behalf from outside weavers on job work basis by supplying them yarn, who then convert the yarn to fabrics by charging them only the conversion cost. These fabrics are then sent for processing to various processors on job work basis. After the required process these fabrics are sent to another job worker for converting these fabrics into bed sheets and pillow covers. At no point of time does the ownership of the fabrics pass on to any of the job workers and all activities are done on their account. These factual details are not disputed by the department. 9.In this regard, the ratio of CBEC Circular No. 120/95-Cus. issued with respect to third party exports under Duty Exemption scheme and EPCG scheme, is relevant. The extract of the above mentioned circular is given below : "Subject : Third Party exports under Duty Exemption Scheme and EPCG Scheme. After in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined on AR4 at the time of clearance, export rebate is not to be denied, when there is no dispute about payment of duty and export of goods. Govt. concurs with this view of Hon'ble Tribunal. Hence, this objection of the Applicant Commissioner is also not sustainable. However, Govt. observes Disclaimer Certificate is to be obtained not only from the merchant-exporter, but also from other Manufacturers of export goods. To this extent, Commissioner (A)'s order is modified. 12.The next objection of the department is in one specific case involving a rebate of Rs. 41,144/- in respect of AR 5 No. 4, dated 16-4-2001, it is clearly seen that the raw material has been shown as "cotton 100% shtng 153 cms" whereas the exported goods are bed sheets and pillow covers and it is not possible for using shirting material to manufacturing bed sheets and pillow covers. The respondent submit that this is a hand written invoice prepared by a clerk and in the column of the description of goods, "shirting width 153 cms", is written. The correct reading of the description should be "sheeting" and not 'Shirting'. In all other invoices the description is read as "sheeting" and the converter wh....