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2023 (10) TMI 807 - HC - Central ExciseRefund of duty paid on inputs for executing the export obligations under Rule 18 of CER read with notification No. 41/2001-CE (NT) dated 26 June 2001 - Misconstruction of Clause 4 (c) of the Notification dated 26 June 2001 which permitted removal of waste on payment of duty if such waste was manufactured or processed out of the factory of the applicant seeking rebate. HELD THAT:- There is no gainsaying that the fixation of input output norms is done to enable the manufacturer exporters to seek rebate for the inputs used in the export of the manufactured product. Admittedly, the goods had been duly exported presumably meeting with all the relevant regulatory norms between the period September, 2003 to January, 2004. It is pertinent to indicate that two rebate claims were filed on 07 January 2004 and third one on 01 March 2004, whereas, the rest of the three were filed after the aforesaid communication dated 18 March 2004. However, the petitioner has not placed on the record a copy of its letter dated 08 January 2004 and it is not clear if the said letter pertained to any request about fixation of input-output norms with regards to export obligations already undertaken or to be taken in future. Applicability of central excise duty on removal of waste/scraps generated during the course of the manufacture of S.S. Utensils etc. - HELD THAT:- A careful perusal of the notification No. 41/2001 dated 26 June 2001 would show that the exporter has to furnish a declaration that CENVAT credit has not been availed and the notification clearly spells out that any waste arising during the manufacture of export goods may be removed on payment of duty as if such waste has been manufactured in the factory of the manufacture - the removal of waste, or sale thereof in home or domestic market, does not prohibit or bar a claim for rebate under the said Rule or notification. Paragraph 4(c) does refer to payment of duty but the said clause applies when there is removal of material or the same is partially processed at a location different from or outside the factory of the applicant. Since presumably the export obligations had been met, the Revisionary Authority took a hyper technical view of the matter. It is evident that in terms of the notification No. 10/2003 dated 01 March 2003, the description of the goods in question was covered vide item No. 28 viz. HSM 7323.90, which is code for S.S. Utensils, read with item No. 51, where the rate of duty is spelt out to be ‘NIL’. Meaning thereby that no duty was payable on such waste and scrap arising during the course of manufacture of the same goods. This is exemplified from the clarification letter issued by the Office of Commissioner of Central Excise, Delhi dated 26 July 2005 placed on the record, and therefore, the impugned order dated 27 September 2019 holding that pre-conditions provided by the Notification No. 41/2001 dated 26 June 2001 were not met by the petitioner, is perverse and cannot be sustained in law. The impugned order dated 27 September 2019 is hereby set aside and the matter is remanded back to the Adjudicating Authority to decide the rebate claims of the petitioner after affording a fresh opportunity for hearing in accordance with law - Petition disposed off by way of remand.
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