TMI Blog2013 (3) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... REPRESENTED BY : None, for the Department. Shri Mohan Gupta (AR), for the Assessee. [Order]. This revision application is filed by the applicant Commissioner of Central Excise Customs, Raigad against the order-in-appeal No. YDB/427/RGD/2011, dated 26-4-2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-II in the case of M/s. Fortune Intermediates (I) Ltd., Surat. 2. Brief facts of the case are that the respondent M/s. Fortune Intermediate (I) Pvt. Ltd. an exporter situated at M-24, Super Tex Tower, Ring Road, Surat a merchant exporter (hereinafter referred to as the claimant ) had procured excisable goods from M/s. Gitanjali Industries, Jammu who availed area base exemption under Notification No. 56/2002-CX. and No. 57/2002-CX., dated 14-11-2002 and was availing self credit facility for payment of Central excise duty. The claimant exported the goods so procured from Jammu unit and filed 16 rebate claims amounting to Rs. 6585076/-. The applicant was issued deficiency-memo-cum-SCN calling them for reply and hearing vide F.No. V(15)Rebate/ Fortune/RGD/05/17161/2352, dated 3-3-2006. The applicant did not followed the different personal hearing da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts a show cause vide an addendum dated 2-7-2010 to show cause notice dated 5-10-2006 was issued to the applicant for resultant proceedings and actions as per law. All the relied upon documents were also sent and personal hearings were re-fixed. The applicant challenged these proceedings on the point of law as well as on merits. On 24-8-2010, the applicant informed that M/s. Gitanjali Industries has already paid the erroneous self credit availed by them. Therefore, the entire duty paid amount of Rs. 6505076 should be considered as regular/proper and the same should be rebated to them with interest. 2.1 The Assistant Commissioner, Raigad vide order-in-original No. 970/2010-2011/AC(Rebate)/Raigad, dated 22-9-2010 rejected the 16 rebate claims amounting to Rs. 65,85,076/- on the grounds that the supplier of the goods M/s. Gitanjali Industries, Jammu had cleared the goods without properly discharging the appropriate central excise duty. The claimant availed the excess inadmissible Cenvat credit, which was used for payment of excise duty of the impugned goods. 3. Being aggrieved by said order-in-original dated 22-9-2010, they filed appeal before Commissioner (Appeals-II), Mumbai who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicates their mala fide intention. Further, this fact was proved by confirmation of demand against them by CESTAT vide Order Nos. 44-51/2010-EX(DB), dated 15-1-2010 [2010 (254) E.L.T. 131 (Tribunal)]. Now appeal against CESTAT decision pending before the Hon ble Supreme Court for decision. When the demand was confirmed for inadmissible excess credit, which was used for payment of duty on goods supplied to M/s. Fortune, the rebate is not liable to be sanctioned on the exported goods and that too when payment of duty by M/s. Gitanjali Ind. Jammu has not accepted by the Department. Considering the facts, the Assistant Commissioner has correctly rejected the 16 rebate claims. 4.4 The citation of case law of Omkar Overseas Ltd. - 2003 (156) E.L.T. 167 (S.C.) is not applicable in this case wherein it has been held by the Apex Court that benefit of rebate is not to be denied because there is short payment. Benefit can be denied only if there is short payment of reason of fraud, collusion or any wilful mis-statement or suppression of facts. In this particular case, the mala fide intention of M/s. Gitanjali Industries, Jammu has been proved as they have knowingly cleared the goods on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein. The clearances of goods by Gitanjali Industries, Jammu were made to the respondent by availing the exemption under Notification No. 56/2002-C.E., dated 14-11-2002. Thus, the clearances of goods made by Gitanjali Industries, Jammu to the respondent by utilizing the excess Cenvat credit lying credited in the Cenvat account on the date of clearance of the goods to the respondent for exports will always be deemed to be treated as the clearances of goods on payment of central excise duty by Gitanjali Industries, Jammu in the capacity of the original manufacturer of the goods. Therefore, the first ground taken by the Department/applicant for the rejection of rebate claims of the respondent do not survive notwithstanding because of the facts that the department had initiated the proceedings against the original manufacturer after the removal of the goods and after filing the rebate claims by the respondent as the respondent was a bona fide purchaser of the goods on which duty was paid or payable at the time of removal of such goods from the factory of the original manufacturer because it is a settled position of law that in those cases where the department has initiated any proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.E. v. Surcoat Paints - 2008 (232) E.L.T. 4 (S.C.) C.C.E. v. Balpharma Ltd. - 2010 (259) E.L.T. 10 (S.C.) C.C.E. v. Birla Corpn. Ltd. - 2005 (186) E.L.T. 266 (S.C.) C.C.E. v. Amar Bitumen Allied Products Pvt. Ltd. - 2006 (202) E.L.T. 213 (S.C.) Omkar Overseas Ltd. v. UOI reported in 2003 (156) E.L.T. 167 (S.C.). 5.6 Similarly on the same footing the Hon ble Supreme Court in the case of Taparia Overseas (Pvt.) Ltd. v. GOI reported in 2003 (161) E.L.T. 47 (S.C.) (sic.) has held that the applicant being bona fide purchaser of duty paid goods cannot be denied the rebate due to alleged wrong availment of Cenvat credit by the supplier of the goods. 5.7 In department s case of C.C.E., Ghaziabad v. Ashoka Metal Decor (P) Ltd. - 2010 (256) E.L.T. 524 the case dealt with by CESTAT is distinguishable on the facts as well as on peculiar circumstances which were involved and prevailing in the case of Standard Surfactants Ltd. v. C.C.E., Kanpur reported in 1998 (103) E.L.T. 675 (Tribunal) the case dealt with by CESTAT is clearly and completely distinguishable on the facts as well as on the peculiar circumstances as are evident from the deposits contained the case details. 5.8 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersal of the dispute credit by the supplier was over; that scheme of the notification did not require the adjudicating authority to keep the rebate claims in abeyance till the dispute about credit was resolved; that there was no allegation that the transaction of the applicants with M/s. Gitanjali was not bona fide that if the applicants had taken the same goods for manufacturing or processing, then the duty paid by the supplier would have been admissible as Cenvat credit and in such a situation, no action could be taken against the applicants as per the C.B.E. C. Instruction in Circular No. 766/82/2003-CX., dated 5-12-2003; that if Cenvat credit could not be denied, the rebate of the said duty also has to be held as admissible; that the demands have already been confirmed against M/s. Gitanjali Ind. and the issue is stated to be in the Hon ble Supreme Court and citing the case law of Omkar Overseas Ltd. - 2003 (156) E.L.T. 167 (S.C.), Commissioner (Appeals) set aside the impugned order-in-original and allowed the appeal of M/s. Fortune Intermediate (I) Pvt. Ltd., Surat with consequential relief. 9. Government notes that department has mainly contended that the Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods cleared on payment of duty from such credit are to be treated non-duty paid in terms of provision of clause g of para 2(A) of Notification No. 56/2002-C.E., dated 14-11-2002. 10. Here Government notes that for applicability of the above stipulation while the applicant Commissioner is placing basic reliance on the straight wordings contained in the above provisions but the Respondent party is countering the same by interpreting the same as per the provisions of Cenvat Credit Rules, 2002 as is evident from all the case laws cited by them, the facts and circumstances of which directly pertains to proceedings/claims as having been taken place under the provisions of only Cenvat Credit Rules, 2004. None of them except one case of M/s. Shree Ranganatha Exports where such contravention of the very above Notification No. 56/2002, dated 14-11-2002 was there but the regularization of such short payments through PLA during the given time periods as made were accepted by the then lower authority after one to one corelation in that very case. As against this cited case, the ingredients of one to one co-relation and confirmation/upholding of impugned demand amounts of crores of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement and any non-compliance/ignoring any part of that would result in denial of consequential benefits - M/s. Eagle Flasks Ltd. v. Commissioner, 2004 (171) E.L.T. 296 (S.C.). 13. Government now takes up an another major cross objection of the respondent as put forth for consideration that the respondent herein was not a party or in connivance in the inadmissible/illegal availment of impugned credits which led the impugned export goods as of non-duty paid category. In this regard, Government restrains itself from commenting upon such universal declaration which directly or indirectly hints towards the categorization of the limits/scopes of committed act because the whole case matter is sub-judice before Hon ble Supreme Court and the whole investigation report of the case is not available before this authority. Respondent has relied upon Gujarat High Court order dated 31-3-2011 in the case of C.C.E., Surat v. Roman Overseas reported as 2011 (270) E.L.T. 321 (Guj.). Government notes that in the said cases manufacturer had procured grey fabrics on duty paying documents (Central Excise invoices) from suppliers who were found non-existent. The manufacturer had availed irregular ..... X X X X Extracts X X X X X X X X Extracts X X X X
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