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TMI Blog2005 (9) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts which attract a certain rate of duty and are exported at nil rate of duty by virtue of exports are not in the ambit of Rule 6 read with sub-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, Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) The provisions of sub-rule (1), sub-rule (2), sub-rule (3) and sub-rule (4), shall not be applicable in case the exempted goods are either - (i) cleared to a unit in a free trade zone; or (ii) xxxxxxx (iii) xxxxxxx (iv) xxxxxxx (v) xxxxxxx (vi) Cleared for export under bond in terms of the provisions of the Central Excise 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished even in case of exempted goods also. The Adjudicating Authority has totally failed to understand the object of Bond/LUT. 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 of other statutory provisions/rules and has the significance till the goods are within the territory of India. Once the goods are exported out of the country and proof of exports in the nature of ARE1, Shipping 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CE Rules read with Notification 43/2001-C.E. (N.T.), Rebate claim of duty paid on inputs used in Export goods under Rule 18 read with Notification 41/2001-C.E. (N.T.), duty drawback etc. under which no duty on the inputs used in the manufacture of export goods is paid. Various schemes under Rules 18, 19 of the CE Rules and other schemes provides for incentives in the shape of refund/rebate of duty paid on the inputs used in export goods to an Exporter despite that no duty is paid on such 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 inadmissibi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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