TMI Blog2014 (8) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent exigencies. In case of export to Nepal, rebate shall be granted to his Majesty, Govt. of Nepal as per conditions of the Notification No.40/2001. Both these rules are silent regarding availment of Cenvat credit which is governed by the provisions erstwhile Modvat Rules. CENVAT Credit Rules provide for taking the credit on inputs/input services used in or in relation to manufacture of final products for payment of duty on such final products. Board issued the impugned Circular to bring the export under 'claim of rebate' and 'export under Bond' at par. In case of export of goods to Nepal under the claims of rebate, the exporter is not allowed any rebate and therefore if such exporters are allowed to utilize the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d exported the impugned input i.e. M.S. Billets as such to Nepal and utilized the credit taken against them for payment of duty on final products. The Ld. Advocate submits that department seeks to recover the credit utilized for payment of duty on the ground that the billets were not exported directly from the factory of their manufacturer and that the procedure prescribed under Notification 45/2001-NT for export under bond to Nepal was not followed by the Applicant. The Ld. Advocate has placed reliance on Board Circular No. 283/117/96-CX dated- 31/12/96 clarifying that clearance of inputs as such for export under bond can still be treated at par with 'final product' and the manner of utilization of credit in such cases will be gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner. He submitted that export to Nepal and to other countries are not treated at par inasmuch as rebate of the duty paid on excisable goods exported to Nepal is not refunded to the exporters but His Majesty's Govt. of Nepal. In this case as the billets were duty paid, the same could have been exported under rebate but to circumvent, the benefit which was not available on export to Nepal has been attempted to be availed by the Applicant by exporting under Bond and utilizing the credit availed towards payment of duty on final products. It is further submitted that in this case the exporter had intentionally made a wrongful submission in their Bill of Exports, that the said inputs were manufactured by them. Ld. A.R. submits that L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rule 3(5) of CENVAT Credit Rules, 2004, When inputs or capital goods, on which CENVAT Credit has been taken are removed as such from the factory or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9: . 6. We find that according to Rule 5 of the CENVAT Credit Rules, 2004: RULE 5. Refund of CENVAT Credit - Where any input or input service is used in the final products which is cleared for export under Bond or letter of undertaking, as the case may be, or used in the intermedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the final products cleared for export under Bond or used in the intermediate products cleared for export shall be allowed to be utilized towards payment of duty of excise on similar products cleared for home consumption (or for export) on payment of duty and where for any reason such adjustment is not possible, by refund. 9. We find that provisions of Clause 57F(1)(ii) are missing in the provisions of present Rule 5 of CENVAT Credit Rules. It is thus evident that the present Rule 5 of CENVAT Credit Rules does not envisage for removal of inputs (in respect of which a credit of duty has been allowed) for export under Bond, treating if such inputs have been manufactured in the said factory. 10. It is further noticed that the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilizing the credit. Clearance of the inputs as such for export under Bond can still be treated at par with 'final product' and the manner of utilization of credit in such cases will be governed by the provisions of Rule 57F(4). 4. It is also observed that in case such inputs are cleared for payment of duty by debit in RG-23A part-II account by virtue of Rule 57F(4)(iii) the manufacturer will be entitled for rebate under Rule 12(1)(a) of the Central Excise Rules. He is, however, put to disadvantage if he opts for export under Bond procedure. The exports under 'claim of rebate' and 'export under Bond' should be at parity since, intention of both the procedures are to make duty incidence nil. It is also an estab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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