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TMI Blog2011 (4) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... s were originally cleared from the factory of M/s. Elder Pharmaceutical Ltd. and M/s. Life Line Drugs &. Intermediates Pvt. Ltd. under Bond and were seized by DRI officials during investigation. On issue of Show Cause Notice, the claimant approached the Hon'ble Settlement Commission and paid the excise duty on these consignments. Therefore, they had not submitted copies of excise invoice. They enclosed the photocopies of Excise Invoices of the said consignments along with the said letter dated 21-11-2007. 3.2 The duplicate copies of TR-6 Challans were submitted to DRI officials as a proof of payment of duty. Therefore, they had submitted triplicate copies of the challans. 3.3 Since the goods were originally cleared under Bond i.e. without payment of duty and the duty had been paid by the claimant subsequently, the disclaimer was not enclosed. 3.4 As regards to the claimant certificate at point No. 3(b) on ARE-1 No. 1-6-07 & 2-6-07 dated 29-8-2006, Notification No. 19 dated 6-9-2004 as amended may be referred to. 3.5 The claimant, vide their letter dated 11th January, 2008 had submitted a copy of the final order passed by the Hon'ble Settlement Commission in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The notification No. 19/2004 issued under Rule 18 of the Central Excise Rules nowhere provides for rejection of refund claim when the duty is paid subsequent to detection of any fraud by DRI. It is submitted that in absence of such a provision, the rebate claim cannot be rejected even when duty is paid subsequently. 5.2 The order of Assistant Commissioner (Rebate), Central Excise, nowhere disputes export of goods and payment of duty. The goods before export were stored in Bhiwandi godown. The applicants have obtained permission from Assistant Commissioner of Central Excise, Kalyan, for diverting the goods for export. The goods were exported under the supervision of Superintendent of Central Excise, Kalyan, he has signed on the back of the ARE-1, copy attached with the rebate claim and also certified that 148 packages have been examined for export purpose and duty has been paid by TR6 challan dated 29-11-2005. The export of goods is also substantiated with the help of following documents : (i) Shipping Bill bearing No. 4548779 dated 28-8-2006 (ii) Endorsement on the back of ARE-1 No. Ex-BHI-01, dated 26-8-2006 and Ex-BHI- 02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars given in the application and the ARE-1 was endorsed. * The Excise Officer deputed for verification of goods for export was satisfied about the identity of goods, its duty paying character and all other particulars and accordingly certified the same. * The Customs Officer has endorsed the ARE-1 to substantiate that the goods contained in ARE-1 have been exported. In view of this it is submitted that as per the Board's circular, the condition that the goods should be exported directly from the factory or warehouse stands relaxed. Therefore, the rebate of duty shall be granted. 5.4 The applicants have applied for extension of period as the export was to be made beyond the period of six months. Copy of application and the reply received from Assistant Commissioner (Bond), Central Excise is attached to substantiate the same. It was informed that the permission is not necessary. It may be noted that the Assistant Commissioner, Kalyan has granted permission for export of goods only after the letter was received from Assistant Commissioner (Bond) that the extension is not necessary. Therefore, it is submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commission and the case booked by the DRI under show cause notice DRI/BZU/F/01/2005 dated 27th September, 2005, inter alia, following amounts were paid on account of the manufacturers - (a) M/s. Elder Pharmaceuticals Ltd. - Rs. 8,06,208/- (b) M/s. Lifeline Drugs & Intermediates Pvt. Ltd. - Rs. 22,76,640/-. 6.4 Subsequently on provisional release some goods were exported and the merchant-exporter M/s. FDC Ltd. claimed rebate of Rs. 8,06,208/- and Rs. 7,58,880/-. 6.5 The subject consignment were originally procured by the claimant under bond without payment of duty for export in the month of March, 2005. It is admitted by the claimant that the bulk drugs - Flaconazole and Niconazole Nitrate were diverted to a warehouse in Bhiwandi, substituted with talc powder and presented to customs for export. The fraud was detected by the DRI and on testing it was conclusively proved that talc powder was misdeclared as the bulk drugs, for misuse of export incentive schemes. Subsequent to issuance of SCN, the claimant approached the Settlement Commission. On settlement of the case, the impugned goods were exported on 26th August, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner, the said goods were exported under ARE-1, bearing Nos. 01 and 02, both dated 29-8-2006 and shipped/sailed on 5-9-2006. Therefore, from the date of clearance from the factory premises i.e. 23-3-2005, the period of six months lapse on 23-9-2005. Therefore, there is a delay of around one and half years in export. However, neither they have applied for extension of time to export the goods cleared under Bond nor they have applied for extension to export the goods after payment of duty within stipulated period. Therefore, the claimant had failed to fulfil the condition 2(b) of the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 as amended. Hence they are not eligible for rebate claims. Further, no disclaimer has been submitted by the claimant from the manufacturers. 6.8 Regarding Board's Circular 294/10/97-CX., dated 30-1-1997, for relaxation to condition of direct export from factory of manufacturer it is submitted in para 8.1 lays down that "An Exporter (including a manufacturer-exporter), desiring to export duty paid excisable goods (capable of being clearly identified) which are in original factory packed condition/not processed in any manner after being cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , DRI officials detained these consignments at Airport and took samples and sent them for testing at Central Drug Testing Laboratory, Mumbai. The test report indicated that these goods were not talc powder. On further investigations by DRI officials, Fluconazole 3 MTs and Moconazole 2.5 MTs were traced in the godown at Manoj Warehouse, Bhiwandi. DRI seized these consignments for further investigation in the month of June, 2005. After issue of SCN by DRI, the applicant approached the Hon'ble Settlement Commission who ordered the provisional release of goods vide Admission Order dated 18-4-2006 and finally decided the case on 22-8-2006. The applicant paid the admitted duty liability on these goods and exported the same under claim of rebate vide 2 ARE-ls under supervision of Central Excise Officers on 29-8-2006. They filed rebate claims and submitted the requisite documents along with TR-6 challan dated 23-12-2005 in support of evidence of payment of duty. The commercial invoice was issued by them on the goods were cleared from merchant-exporters' end. The findings of adjudicating authority on export of goods and payment of duty are as under :- "In this case, I find that the DRI had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves that duty paid subsequent to clearance of goods from factory is not denied by department. The duty liability accepted on these goods before Settlement Commission paid through TR-6 Challan. The Assistant Commissioner, Central Excise (Tech.), Mumbai-V vide his letter F.No. VT/BOND/M-V/223/Ext/4/060-07, dated 17-8-06 had informed that there was no need to grant permission to export the consignment as the duty has already been discharged. As regards following correct procedure, applicant was granted permission as a special case to export these goods vide ACCE Kalyan-I Division letter F.No. Cx/Misc/Permission/FDC/KI/T-II/06/4371, dated 2-8-06 subject to the condition that they will follow all procedures, conditions and safeguards as laid down in Board Circular No. 18/92-Cx-6, dated 18-12-92 and No. 294/10/97-CEX, dated 30-1-97 to the satisfaction of jurisdictional range superintendent on whose goods such goods are stored. At the same time Superintendent Central Excise was also directed to ensure that goods should be in original packed condition and appropriate duty have been discharged on the goods under export and ensure compliance of above mentioned Board's circulars. Applicant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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