TMI Blog2005 (9) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Rule 6 of the CCR, 2002 and CBEC Circular dated 4-6-96. 2. A Show Cause Notice was issued to the appellants proposing rejection of the claim on the basis that the case is not covered within the purview of sub-rule (5)(vi) of Rule 6 of CCR, 2002. The export goods manufactured and cleared by them cannot be treated as goods Exported under Bond as they were not required to execute any Bond/LUT being the final product i.e. finished leather attracts Nil rate of duty. Further that as per sub-rule (5)(vi) of Rule 6 of the rules Bond/LUT is required to be furnished only if there is any duty liability on the exported goods. Since the goods manufactured by them do not attract any duty, therefore, no Bond/LUT was required and as such the goods cleared by them cannot be treated as Export under Bond. 3. The adjudicating authority rejected the claim under Section 11B of the CE Act, 1944 by holding that the goods can be exported under Bond/LUT only if there is some duty on the goods whereas in this case there is Nil duty, the exports cannot be made under Bond which has been done deliberately to claim the refund. Since the goods cannot be treated as Exports under Bond, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -rule (5)(vi). 7. The learned Assistant Commissioner has erred in ignoring the CBEC instructions as enshrined in Chapter 9 of the Mannual/Supplementary Instructions. 8. The Learned Assistant Commissioner has erred in ignoring that the matter is directly covered with the Judgments as referred in para 3.9 of the reply to SCN. 9. The learned Assistant Commissioner has erred in putting total emphasis on the concept of under Bond and failed completely to understand the theme concept under bond . The Bond/LUT is furnished to secure due compliance of rules/procedures. The Bond/LUT is a collateral security to ensure not only payment of duty in case of non-export of goods cleared without payment of duty but also compliance of other statutory provisions. 10 That since the claim has exceeded beyond the stipulated period of 3 months, therefore, Interest be allowed as per provisions of Section 11BB. 5. Shri Ajay Jain, Advocate alongwith Shri Harish Bansal, GM (Corporate-Finance) appeared for Personal Hearing. At the time of personal hearing, the appellants re-iterated the submissions already made in the grounds of Appeal and stressed that the claim pertains to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Rules, 2002. (vii) xxxxxxx 8. On critically examining the above provisions, it is explicit clear that the provision of sub-rule (1), (2), (3), and (4) are not applicable to exempted goods if such goods falls under any of the category (i) to (vii) provided under the said sub-rule (5). This rule specifically speaks of exempted goods. Further, proviso (vi) of this sub-rule (5) provides that cleared for export under Bond in terms of the provisions of Central Excise Rules, 2002 . The contention of the appellants that Bond/LUT is required in case the goods are exempted has a force. Had the Bond not been required in case of exempted goods then perhaps there was no need to mention cleared for export under Bond under this clause (vi) specially when sub-rule (5) relates to exempted goods only. The wording of this rule clearly stipulates that Bond/LUT is required to be furnished in case of exempted goods also. Moreover, if the intention of the legislature is not to give relief under this sub-rule to exempted goods, then there was no need to enact this particular sub-rule. 9. I further see force in the contention of the party that the provisions of Rule 6 are not applicable to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Bill/Bill of lading etc are on the record then the role of Bond/LUT is complete and has no further significance. The Adjudicating Authority has failed to see the other side of the coin. e.g. in case a manufacturer of dutiable goods exports certain goods without filing any Bond/LUT but the Exports is established from the relevant documents like ARE1, Shipping Bill/Bill of lading then the question is as to whether the party is liable to pay duty of excise on the basis that they have not furnished Bond/LUT. Certainly not, the reason being the Exports have been established. Similarly, following the same analogy, I hold that once the Export are established, the filing or non-filing of Bond/LUT has no significance. 12. I have also seen the CBEC supplementary instructions/Manual as contained in Chapter 7 para 3.4 that a Bond/LUT is required to be filed by a manufacturer who is a Central Excise assessee. There is no bar in filing of Bond/LUT in case a product is exempted/attarts Nil rate of duty. Since in terms of the provisions of Rule 6 read with CBEC manual, an assessee irrespective of the product attracting Nil rate of duly/exempted goods is required to furnish Bond/LUT, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Export goods. Therefore, there is no justification to deny the incentive of input duty in case a mfr./exporter adopts the route under Rule 5 of the CCR, 2002. 15. The Judgment in the case of M/s Hindustan Petroleum Ltd. v. CCE 1995 (77) E.L.T. 256 (S.C.), as relied upon by the Adjudicating Authority is not applicable to any corner of the present case as in the said case the party failed to follow any of the provision or procedures prescribed under the rules/notification which was a mandatory requirement whereas in the instant case there is no such procedural or mandatory lapse. Similarly, the Circular No. 754/70/2003 dated. 9-10-2003 is also not relevant as the same provides for inadmissibility of cenvat credit on inputs used in the manufacture of exempted final product. The bar relating to inadmissibility of Cenvat credit on exempted goods is contained in Rule 6 of the CCR to which there is an exception for exports under sub rule (5) of the said rule. Except this rule there is no other provision in the CE Law which provides any restriction for taking the credit. Since the present matter relates to Exports which is covered by exception under sub-rule (5)(vi) of Rule 6, therefo ..... 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