TMI Blog2012 (9) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... by Commissioner of Central Excise Service Tax (Appeals), Meerut-I with respect to Order-in-Original passed by Additional Commissioner of Central Excise, Ghaziabad. In this case M/s. Essel Foundaries (P) Ltd., 40/3, Site-IV, Indl. Area, Sahibabad, Ghaziabad. 2. Brief facts of the case are that the respondents are engaged in the manufacture of electrical goods, cables MCCB falling under Chapter Nos. 85 74 of the First Schedule to the Central Excise Tariff Act, 1985. They exported finished goods against various ARE-1 on payment of Central Excise duty and filed rebate claims for the duty so paid on the said goods. The jurisdictional Asstt. Commissioner, vide Order-in-Original dated 22-5-2007 and 24-5-2007 sanctioned the rebate claim. Subsequently, the department observed that the appellants had taken DFIA Licence (Duty Free Import Authorization Licence), although they had not imported inputs in terms of the said Licence. According to the department, the said amount of rebate claim of Rs. 25,54,281/- was erroneously sanctioned to them inasmuch as they availed/claimed the said rebate of duty by availing the double benefit i.e. availment of Cenvat credit of duty paid on inputs un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TP 2006 as such the availment of Cenvat credit by the party was irregular and therefore, case of rebate of duty paid on their finished exported goods from the said irregularly availed CENVAT credit, is erroneous and inadmissible. 4.3 As evident from the Board Circular No. 11/2009-Cus., dated 25-2-2009, the Law Ministry has also clarified that from the perusal of the DFIA Scheme and the conditions laid therein it appeared that the authorization holder cannot avail CENVAT credit on the inputs used in the manufacture of the goods exported under DFIA Scheme as well as duty free imports under the DFIA Scheme simultaneously as it amounts to double benefit against the spirit and object of the scheme. That in terms of condition (v) of the Notification No. 40/2006-Cus., dated 1-5-2006, Cenvat credit cannot be availed of in respect of inputs used in the manufacture of the goods exported under the DFIA Scheme whereas in the instant case, the party have availed CENVAT credit on the inputs used in the manufacture of the goods exported under DFIA Scheme. The Cenvat credit so availed has been utilized/adjusted by the party towards payment of Central Excise duty on finished goods exported under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit under the DFIA Scheme as claimed by the Revenue Department in the present application. Hence, the present application deserves to be dropped. The noticee has never procured any duty free inputs against the said authorization and it has worked in the DFIA Scheme only on post-Export bases. Hence, question of violating the condition No. (V) or any other condition of the aforesaid Notification No. 40/2006-Cus. as alleged by the Revenue Department do not arise. Hence, the present application deserves to be dropped and order-in-appeal be affirmed. 5.4 With effect from August 19, 2009 vide the Finance Act, 2009 the original Notification No. 40/2006-Cus. has already been amended with the retrospective effect so as to give the true colour and serve the desired purpose of the DFIA Scheme. Since the original Notification has already been amended with retrospective effect henceforth, all the clarification to the previous/unamended notification, shall become ineffective and redundant with retrospective effect. It is further stated that the noticee has never availed any double benefit, while working under the DFIA Scheme. As clear from the facts narrated above, during the relevant tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of exemption benefit under DRA Licence Scheme. Then a show cause notice dated 3-1-2008 was issued for recovery of said rebate claims. The adjudicating authority now vide order-in-original dated 6-6-2008 confirmed the duty demand of Rs. 25,54,281/- along with interest. Being aggrieved with said order, respondents filed appeal before Commissioner (Appeals), who vide Order-in-Appeal dated 27-2-2009, allowed the appeal on the ground that Notification No. 19/2004-C.E. (N.T.), dated 6-9- 2004 nowhere provides restriction of rebate claim if claimant involved under DFIA Scheme. 9. In this regard, it is observed that DFIA Scheme is governed by Foreign Trade Policy (2004-09) and custom Notification No. 40/2006-Cus., dated 1-5-2006 was issued to give effect to these provisions of FTP. One of the condition stipulated in para 4.4.7 of the Chapter 4 of FT Policy was that no Cenvat credit facility shall be available on inputs either imported or procured indigenously against the Authorization. The condition (v) of the corresponding Customs Notification No. 40/06-Cus., dated 1-5-2006 issued to implement the DFIA scheme accordingly provided that the Export obligation would be discharged by expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of finished goods under DFIA Scheme. However, in the meantime, Finance (No. 2) Act, 2009, in the Second Schedule (Section 93), amended Notification No. 40/2006-Customs, dated 1-5-2006 retrospectively from the 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. 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, the relevant 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 vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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