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TMI Blog2010 (2) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bangalore-II M/s. TTP Technologies (P) Ltd., Bangalore 105/2007 (R) 14-3-2008 159 & 160/2008/CE 31-7-2008 July, 07 97,70,728/- 3 198/70/ 08-RA The Commissioner Central Excise, Bangalore-II M/s. Big Bags India (P) Ltd., Bangalore 93/2007 (R) 6-2-2008 93 & 94/2008/CE 22-5-2008 May, June, July, 07 60,79,904/- 2. As the issue involved in all these cases is similar, so these are taken up for consideration by the common order. 3. Brief facts of the cases are that the respondents have filed various rebate claims for payment of duty paid on the goods exported under Rule 18 of the Central Excise Rules, 2002 read with the Notification No. 19/2004, dated 26-9-2004. On scrutiny of the claims, it was observed that the respondents have exported the goods in discharge of export obligation under duty free import under DFIA Scheme. And the respondents have procured inputs on payment of applicable duties and availed Cenvat credit on the same and the said credit was utilized for payment of duty on the resultant products exported under the DFIA Scheme. It appeared that the respondents have not complied with the provisions of Notification No. 40/2006-Cus., dated 1-5-2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 40/2006-Cus., dated 1-5-2006 and the Commissioner (Appeals) has allowed the appeal of the assessee without appreciating the above factual and legal position. 5.3 The Commissioner of Central Excise (Appeals), Bangalore has held in his findings that the restriction of availment of Cenvat credit under the Cenvat credit Rules specifically applies only in respect of the raw materials imported/procured indigenously against the duty free import authorization. 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 viewed in isolation with reference to only the finished goods exported but to be viewed in totality of the entire scheme. Accordingly, it cannot be claimed that such scheme is applicable only to the final products and not the raw materials/inputs used in the manufacture of such final products. 5.4 As per condition (v) of Notification No. 40/2006-Cus., dated 1-5-2006, it is to be obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.1 On the merits of the revision application, we submit that entire proceeding has been commenced based on misunderstanding of the DFIA Scheme and the Customs Notification No. 40/2006-Cus., which do not prohibit use of inputs on which Cenvat credit has been taken. What these provisions prohibit is taking of Cenvat credit on the inputs procured against DFIA. There is no absolute bar either in DFIA Scheme, or in the aforementioned notification, against taking Cenvat credit on the inputs used in the DFIA exports. The appellate authority has correctly appreciated this position of law, by laying emphasis on the language of Notification No. 40/2006-Cus. in the findings part of his order. Hence, we submit that the challenge to the impugned order-in-appeal is without merit and is liable to be dismissed. 6.2 We submit that we have been granted DFIA by the Regional Authority. But, we have not imported any inputs against the DFIA in respect of these exports. Relevant DFIA scrips have remained unused. Hence, we submit that the question of taking Cenvat credit on inputs procured against DFIA does not arise in the facts of our case. 6.3 The original authority has relied on con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re for grant of rebate claim. This notification was amended by Notification No. 37/2007-C.E. (N.T.), dated 14-9-2007 by adding clause (h). Under this amendment, rebate claim would not be available to the exporters who claim the benefit of notifications specified under clause (h). We submit that since customs exemption Notification No. 40/2006-Cus., dated 1-5-2006 does not find place in clause (h), a claimant of benefit under that notification is not debarred from claiming rebate of duty paid on the final products. 6.9 We submit there is averment that we have availed Cenvat credit of duty paid on the raw materials used in the manufacture of final products, which were exported under DFIA Scheme. This clearly shows that the objections was to the taking of Cenvat credit on inputs used in the exported goods, and not in relation to the duty paid on the exported goods themselves. If the grievance of the Revenue was the incorrectness of Cenvat credit taken, then the recourse ought to have been to deny this credit and not deny the rebate claim on the final products exported. We submit that the two are not legally and logically related. 6.10 We submit that the appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding), power has not been conferred on the original authority who is a Central Excise Officer, to determine whether or not an export has complied with the conditions of an exemption notification issued under the Customs Act, 1962. Hence we submit that the finding of the appellate authority is legally correct. 7. The cases were listed for personal hearing on 14-10-2009 and 15-10-2009 at camp office in Mangalore. Sh. Kurian Oman, appeared on behalf of the applicant in respect of cases 1 to 3 and reiterated the grounds of revision application. Sh. B.N. Gururaj, advocate appeared on behalf of the respondents No. 1 to 3 and reiterated the submissions of their counter reply. 8. Govt. had gone through oral and written submissions of both the applicant and the respondent and has also perused the orders passed by the lower authorities. 9. From the perusal of the records, Govt. observes that the question to be decided is whether rebate under Rule 18 of the Central Excise Rules, 2002 is admissible to the applicant if they have exported the goods under Duty Free Import Authorization (DFIA) Scheme while availing Cenvat credit under Cenvat credit Rules, 2004. 10. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 9 of the Circular No. 11/2009-Cus., dated 25-2-2009 C.B.E. & C. has directed the field formations to take action to safeguard revenue as suggested in sub-paras a, b, c and d of said para, in respect of past cases of duty free imports for the period 1-5-2006 to 18-2-2009. The said circular also nowhere speaks about any restriction on availment of rebate of duty paid on such resultant products exported under DFIA scheme while availing Cenvat credit on input procured in normal course and not against any Authorization. 13. Govt. further observes that CESTAT, Bangalore vide their final order No. 118-120/2009, dated 19-12-2008 in Appeal Nos. 381, 402 and 529/08 in the case of M/s. T.T.P. Technologies and Others v. CCE, Bangalore [reported in 2009 (092) RLT 0757 (CESTAT - Bangalore) = 2009 (240) E.L.T. 724 (Tri.-Bang.)] has held that as in these cases the applicant has not procured the inputs against the authorization but have obtained in the normal course on payment of duty, hence the Condition (v) of the said notification has not been violated. The rebate of duty under Rule 18 of the Central Excise Rules, 2002 on the finished goods is permissible and allowed the appeals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable only when the input in the export product were imported or procured against the authorization because the DFIA allows exemption from the applicable duties." As respondent has procured the duty paid inputs without any authorization, same is entitled to take Cenvat credit. 9. The para V of the Customs Notification No. 40/2006-Cus., dated 1-5-2006 debars the exporter to claim the rebate of duty paid on materials used in the manufacture of resultant product under Rule 18 of the Central Excise Rules, 2002 against materials imported/procured against the said authorization. The respondent is claiming rebate on the finished goods exported and has not procured the material against the said authorization. As the respondent is said to have exported the goods under rebate under Rule 18 and complied with all the conditions of the notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, as held by the Commissioner (Appeals) in the impugned order-in-appeal. Govt. finds no infirmity in the said impugned order-in-appeal, hence reject the revision application being devoid of merit" 15. The ratio of abovesaid GOI order is squarely applicable to this case as facts of these cases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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