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TMI Blog2010 (9) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 3,79,895.31 and eight rebate claims on 8-1-08 against ARE-2 No. 01/07-08, dated 20-7-07, 4/7-08, dated 17-9-07, 5/7-08, dated 18-9-07, 6/7-08, dated 28-9-07, 7/7-08 dated 28-9-07, 8/7-08, dated 29-7-07, 9/7-08, dated 29-10-07 and 10/7-08, dated 19-11-07 totally amounting to Rs. 12,88,704/10 of Central Excise duty and two rebate claims have been filed on 29-1-08 against ARE-2 No. 11/07-08 & 12/07-08 both dated 10-12-07 totally amounting to Rs. 3,34,162.08 of Central Excise duty on material used in the manufacture of export goods in terms of Notification No. 21/2004-C.E. (N.T.), dated 6-9-04. 2.3 On scrutiny of the rebate claims, it was observed that the above said goods have been exported as such without being subjected to any further manufacturing process. Therefore show cause Notices dated 8-11-07 & 31-1-08 were issued to the assessee asking them as to why : (i) the products M.V. parts (stabilizer links) received from M/s. Padmavati Engineers (India), Ratanpur, Gujarat should not be considered as brought out items as no further manufacturing activity was carried on the said goods. (ii) The rebate claims should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims submitted by the claimant is not correct. The claimant is seeking rebate of duty suffered on the inputs used in the manufacture of export product. The situation here is that the product which the claimant claims to be as an input is infact a fully manufactured product. Hence, the claimant's claim under ARE-2 is totally incorrect. As the claim itself is incorrect, the question of sanctioning any rebate does not arise at all. The permission granted to the claimant for availing benefit of Central Excise duty paid on materials used in manufacture and packing of export goods in terms of Notification No. 21/2004-C.E. (N.T.), dated 6-9-04 has been cancelled in order-in-original No. R-267/07-08 dated 18-12-07. 2.5 The assessee being aggrieved filed appeals before the Commissioner (Appeals) who vide order-in-appeal No. mentioned above set aside the impugned orders and allowed the appeals with consequential relief. 2.6 The Commissioner (Appeals) observed that Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 issued under Rule 18 of Central Excise Rules, 2002 grants rebate of whole of the duty paid on excisable goods used in the manufacture or processing of export goods on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. A.V. Industries, do not appear to be correct, legal and proper due to the reasons enumerated below : Notification No. 21/2004 reads as follows : "rebate of whole of duty paid on excisable goods (hereinafter referred to as 'materials') used in the manufacture or processing of export goods shall on their exportation out of India, any country except Nepal and Bhutan be paid subject to the conditions and the procedure specified." 3.2 Commissioner (Appeals) relying upon CBEC's Excise Manual of Supplementary Instruction para 1.3, Part V Chapter 8 that also states 'the material may be used for manufacturing or processing, and any processing not amounting to manufacture (such as packing, blending etc.) will also be eligible for the benefit under said notification and thus, it is not necessary that the goods procured under Notification No. 21/04 should be subjected to process amounting to manufacture". Whereas in the instant case, the above said CBEC's Excise Manual of Supplementary Instruction is not relevant as it is basically pertaining to procurement of excisable goods without payment of duty for the purpose of use in the manufacture or processing of export goods. 3.3& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) (iii) Punjab Stainless Steel Ind. - 2008 (226) E.L.T. 587 (T) (iv) Norris Medicines Ltd. - 2003 (56) RLT 353 (T) (v) Medispan Ltd. - 2004 (112) ECR 664 (T) = 2004 (178) E.L.T. 848 (Tribunal) Once goods have been exported on payment of duty, rebate is not deniable, based on the following judgment : (i) Alpha Garments - 1996 (86) E.L.T. 600 (T) (ii) Indo Euro Textiles Pvt. Ltd. - 1998 (97) E.L.T. 550 (GOI) (iii) Birla VXL Ltd. - 1998 (99) E.L.T. 387 (T) (iv) CCE v. Stainless India Ltd. - 2008 (222) E.L.T. 210 (T) 4.3 Once duty on the final products exported has been accepted by the Department, although was not payable, rebate is not deniable, even if the activity does not amount to manufacture, based on the ratio of the following judgments : (i) M.P. Telelinks Ltd. - 2004 (178) E.L.T. 167(T) (ii) Stumpp Scheule and Somappa Ltd. - 2005 (69) RLT 786(T) = 2005 (191) E.L.T. 1085 (Tribunal) (iii) Shivali Udyog (I) Ltd. - 2006 (204) E.L.T. 94 (T) (iv) Super Forgings and Steels Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procured under Notification No. 21/2004-C.E. (N.T.) should be subjected to a process amounting to manufacture and that hence, rebate claim cannot be denied on this ground. 4.5 The exporters say that, once duty paid at the time of clearance of goods exported by showing duty payable in Central Excise invoices and raising debits in Cenvat/PLA has been accepted by Department as duty, denying the rebate would be incorrect and would not have any basis. It is also a settled position of law that, once duty on the final product has been accepted, neither credit availed on the inputs is deniable nor rebate of duty paid from Cenvat Account is deniable, based on the following judgments : (i) 2003 (156) E.L.T. 602 (T) - PSL Holdings (ii) 2004 (178) E.L.T. 167 (T) - MP Telelinks (iii) 2004 (60) RLT 342 (T) - Creative Enterprises (iv) 2003 (155) E.L.T. 330 (T) - Golden Iron & Steel Works (v) 1995 (77) E.L.T. 588 (T) - Komal Metals Pvt. Ltd., (vi) 2005 (69) RLT 786 (T) = 2005 (191) E.L.T. 1085 (Tribunal) - Stumpp Scheule and Somappa Ltd. In the present case, when the fact of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. In this connection, let us peruse Rule 18 of the Central Excise Rules, 2002 which reads as under : "Rule 18 : Where any goods are exported, the Central Government may, by notification grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedures, as may be specified in the Notification." 9. From above, it is seen that the terms used is material not input. Moreover, the material is to be used in the manufacture of processing of the goods. The process of processing of the goods may not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944. The process of testing/re-packing etc. definitely amounts to processing of the goods. 10. Para 1.2 & 1.3 of Part V of Chapter 8 of CBEC's Excise Manual of Supplementary Instructions, 2005 relating to Export under claim for rebate of duty on excisable materials used in the manufacture or processing of export goods are reproduced below : "1.2 It may be noted that in Rule 18 and in said Notification expression 'export goods' h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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