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TMI Blog2011 (1) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted along with the claim, it was noticed that the export made by the assessee are towards the fulfillment of export obligation under DFIA Scheme. Further, the assessee is availing Cenvat Credit on inputs procured indigenously and while exporting the goods the duty has been paid from cenvat account and not by cash. The provisions of the condition no. (v) of the Customs Notification No. 40/2006-Cus., dated 1-5-06 the claimant is bound to fulfill the export obligation by exporting the manufactured products without availing the facility admissible under Rule 18 of Central Excise Rules 2002. In the instant case, since the assessee had already claimed the benefit of DFIA Scheme, they cannot claim the benefit of the rebate of duty as this would amount to double benefit of the rebate of duty as this would amount double benefit which is not the intention of the Government. Aggrieved by this order-in-original, the respondent filed appeal against the aforesaid order-in-originals before Commissioner (Appeals) in appeal No. 138/2008 B III. 2.3 The Commissioner of Central Excise (Appeals-II), Bangalore, vide order-in-appeal No. 26/2009-C.E., dated 26-2-09, held that the condition (v) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d indigenously against the Duty Free Import Authorisation. The above findings of the Commissioner (Appeals) appears to be incorrect inasmuch as when the final product is exported under DFIA Scheme, it should be deemed that the raw materials/inputs (used in the manufacture of such exported goods) are also procured under that scheme only. The export of the goods under a particular scheme cannot be claimed that such scheme is applicable only to the final products and not to the raw materials/inputs used in the manufacture of such final products. 3.4 As per condition (v) of the Notification No. 40/2006 Cus., dated 1-5-06, it is to be observed that in respect of the goods specified in the authorization and exported under DFIA Scheme (i) the facility under Rule 18 (i.e. rebate of duty paid on the materials used in the manufacture of the resultant product) or (ii) under sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 (procurement of raw materials without payment of duty for use in the manufacture or processing of the goods, which are exported) or (iii) cenvat credit under the Cenvat Credit Rules, 2004 in respect of the materials imported/procured against the said authorisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also. The Commissioner of Central Excise, Bangalore-III is bound by the said judgments of the Hon'ble Tribunal, and is bound to follow the same, however has without taking into consideration of this decision has filed the present appeal. Hence it is submitted that appeal under Section 35EE of the Central Excise Act, 1944 is contrary to law inasmuch as the Commissioner of Central Excise, Bangalore-III is bound by the decision of the Hon'ble Tribunal. 4.4 At para (i) to ground of appeal, it has been stated by the department that "when the assessee has not fulfilled any of such conditions/export obligations, they are not entitled to the rebate of the duty paid on the final products, which are exported under the said DFIA Scheme" is denied and further it is submitted that all the necessary conditions under the DFIA Scheme has been fulfilled. Assuming but not admitting for a moment that the conditions/export obligations were not fulfilled as imposed under the said DFIA Scheme, it is humbly submitted that the DFIA license/authorisation is issued by the Directory General of Foreign trade (DGFT) under the Export Import Policy. Further, the goods are allowed for import/export under Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty paid on the materials used in the manufacture of resultant product. 4.7 The grounds made out at para (iii) is not based on the facts on records. In respect to the ground that "when the final product is exported under DFIA Scheme, it should be deemed that the raw materials/input (used in the manufacture of such exported goods) are also procured under that scheme only." Is contrary to the facts on records inasmuch as the duty paid nature of the input was established before the original authority, and the same has been accepted. Further, neither the original authority nor the applicant authority has given a finding that the locally procured inputs were obtained duty free under the DFIA authorization. 4.8 The grounds made out at para (iv) is neither base on facts nor on law. Further the ground that "the intention of the Government is very clear that the inputs/raw materials used in manufacture of the finished goods, (which are in turn by way of allowing cenvat credit on the inputs as well as granting rebate on the final product. It appears that the Commissioner (Appeals) has failed to appreciate the above intention of the said notification and passed the order in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red indigenously against the authorization." The para V of the Customs Notification No. 40/2006-Cus., dated 1-5-06 reads as below : "That the export obligation as specified in the said authorization (both value and quantity terms) is discharged within the period specified in the said authorization exporting resultant products, manufactured in India which are specified in the said authorization and in respect of which facility under Rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 or Cenvat Credit under Cenvat Credit Rules, 2004 in respect of material imported/procured against the said authorization has not been availed." From the reading of the above paras, it is clear that the Cenvat Credit will not be allowed if the materials is procured against the authorization. This is not the department's case that the respondent has procured the material against authorization and taken the cenvat credit as otherwise also the respondents are entitled to procure the material duty-free against the authorization, so there is no question of taking the Cenvat Credit. This point has further been cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Scheme. The effect of this retrospective legislation is that Notification No. 40/2006-Cus., dated 1-5-06 never prohibited rebate on export of goods under DFIA Scheme, if the Cenvat Credit of duty paid on imported/procured raw material have been availed. In this regard. Para M.9 under the Miscellaneous and Legislative Amendments of Explanatory Notes - Customs of Budget Bulletin 2009, is reproduced below :- "Notification No. 40/2006-Customs, dated 1-5-06 has been amended retrospectively from its date of issue so as to allow the facility of rebate in respect of locally procured materials used in the manufacture of goods exported under the Duty Free Import Authorisation Scheme and carry out other related changes (Clause 92 of the Finance (No. 2) Bills refers)", which has since been enacted vide Section 93 of Finance (No. 2) act, 2009 on 19-8-09. In view of above, Government observes that rebate of duty paid on final products exported under DFIA Schemes is admissible as Notification in question has been amended retrospectively from the date of issue vide Section 93 of Finance (No. 2) Act, 2009. 10. Therefore, Government sets aside the impugned orders and remands case back t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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