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TMI Blog2013 (5) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... granting special benefits to units situated in Kutch district of the State of Gujarat in order to encourage setting up of manufacturing units in the district after earthquake of 26.1.2001, which devastated the said region. 3.2 To the goods manufactured by the petitioner, which were ultimately exported, the petitioner also availed of Exemption Notification No.19 of 2004 dated 6.9.2004. Such Notification was issued by the Government of India in exercise of powers under Rule 18 of the Central Excise Rules, 2002 ( "the Rules" for short). The Notification granted exemption in the form of a rebate of whole of the duty of excise falling under First Schedule to the Central Excise Tariff Act, 1985 when such goods are exported to countries other than Nepal and Bhutan. Availment of such exemption was subject to several conditions contained in the said Notification, to which we would refer to at a later stage. 3.3 The petitioner cleared its goods manufactured in the unit situated in Kutch region for export during the period between 24.8.2007 and 31.8.2007. Admittedly such goods though were cleared for export after following conditions mentioned in the Exemption Notification No.19/2004, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressly made the rebate inadmissible to the notice since 17-9-2007, it can be construed that the rebate claims cannot be made on any goods cleared for export on or after 17-9-2007, the date from which the notification is effective. The notification No.37/2007-CE(NT) dated 17-9-2007 has only prospective effect and cannot be implied retrospectively. Therefore, the noticee are eligible for the rebate on the goods cleared for export on or before 16-9- 2007, under claim of rebate." 5. Counsel for the petitioner submitted that the Adjudicating Authority did not pass final order in view of the petitioner's challenge to the CBEC circular dated 8.12.2006, which was pending before this Court. He pointed out that this Court by judgment in the case of Welspun Gujarat Stahl Rohren Ltd. vs. Union of India reported in 2010 (254) E.L.T 551 (Guj.) struck down the circular. Such decision has also been upheld by the Supreme Court. Thereupon, the Adjudicating Authority proceeded to examine the petitioner's refund claims. By an order dated 3.12.2010, the Adjudicating Authority granted the rebate and passed the following order:- "13.(i) I hereby sanction the rebate of Rs.2,25,35,758/- (Rupees two crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 to 31.08.07 along with ARE-I 171 to 178 all dated 24.08.07 to 31.08.07 by complying all the conditions and provisions of the notification prevalent at that time, and right to rebate vested in exporter once the goods are cleared from factory for export, that the Not. No.37/07-CE(NT) dated 17.09.07 cannot be made applicable to said exports, as the said notification does not have a retrospective effect, that relevant date prescribed under explanation to section 11B of Central Excise Act, 1944 is for computation of time limit for filing refund claim and it does not affect their eligibility to refund claim. 8. Government notes that the governing statutory provisions for grant of rebate of duty paid on exported goods are contained in Rule 18 of the Central Excise Rules, 2002 which read as under:- "Rule 18. Rebate of Duty- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions and limitation, if any, and fulfillment of such procedure, as may be specified in the notification." The above s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or limitation of said notification are complied with. The entitlement of rebate benefit arises as soon as goods are exported. So the conditions or limitations as prescribed in notification must be satisfied on the date when export takes place. If the argument of the applicant that rebate claim has accrued on the date of clearance for export from factory, is to be accepted then another argument that rebate becomes admissible as soon goods are manufactured for export can also be raised. Government finds that as per rule 18 read with Not. No.19/04-CE(NT) the entitlement of rebate claim takes place on the export of goods and therefore it cannot be related to clearance of goods from factory." 9. Against such orders passed by the Appellate Commissioner and the Revisional Authority, the petitioner has preferred this petition. 10. Learned counsel Mr. Modh for the petitioner raised following two contentions:- 11.1 First contention was that the amendment dated 17.9.2007 in the Notification No.19/2004 would not apply to the petitioner in the facts of the present case. His contention was that once the goods were cleared for export from the factory of the petitioner, right to claim reba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have travelled beyond the scope of the show cause notice. 14. Learned counsel Mr. Champaneri, representing the Government of India reiterated such contentions. 15. Having thus heard learned counsel for the parties, we may proceed on facts which are virtually undisputed. To recapitulate such facts, the petitioner claimed benefit under Exemption Notification No.39/2001 granting such benefits to the manufacturing units located in Kutch district. To the goods, manufactured in such unit, which were exported, the petitioner also claimed benefit under Exemption Notification No.19/2004. Such exemption grants rebate of the excise duty falling under the First Schedule to the Central Excise Tariff Act, 1985. Such exemption is subject to certain conditions and limitations. Condition (h) in paragraph 2 was inserted by amendment Notification No.37/2007 dated 17.9.2007. The petitioner made exports of goods after 17.9.2007 but claimed rebate on the ground that such goods were cleared from the factory premises for export before 17.9.2009. Short question, therefore, is whether to such export, the amended notification can be applied. 16. Exemption Notification No.19/2004 has been issued under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissioner; (ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Meritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole or in part." 19. From the above provisions, it can be gathered that the exporter would be entitled to file the rebate claim only upon export of goods. Clearance of such goods from the factory for export directly is just one of the conditions subject to which such refund/rebate claim could be granted. Fulfillment of such condition,however, cannot be equated with the right to claim rebate. Such right is hedged by requirement of fulfilling of conditions and limitations contained in the Exemption Notification and all the require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were actually exported. The Supreme Court, basing reliance on the concept of movement of goods outside the territorial waters of India to complete the export, held that the claim of duty draw-back was not valid. It was observed as under:- "4. Learned counsel for the appellants contends that, in the instant case, there was no export as contemplated by the said Rules inasmuch as the said cargo had not been taken out of India to a place out of India; in fact, the vessel had sunk and the said cargo was destroyed within the territorial waters of India. Our attention was drawn to the judgment of this Court in Collector of Customs, Calcutta v. Sun Industries, 1988 (35) E.L.T. 241. This was a case where goods had been loaded on to a vessel in India and the vessel had sunk after it moved out of the territorial waters. This Court said: "When the ship got clearance and moved out of the territorial waters, the export was complete.... But the expression 'taking out to a place outside India' would also mean a place in high seas. It is beyond the territorial waters of India. High seas would also mean a place outside India, if it is beyond the territorial waters of India. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.R.513(E) dated 25th June, 2003] or 71/2003- Central Excise dated the 9th September, 2003] [G.S.R.717(E) dated the 9th September, 2003] or No.20/2007-Central Excise, dated the 25th April, 2007 [G.S.R.307(E), dated the 25th April, 2007], the rebate shall not be admissible under this notification." 24. It is undisputed that the petitioner is covered by such condition since the petitioner claims benefit of Exemption Notification No.39 of 2001. In that view of the matter, in our opinion, the Appellate as well as Revisional Authorities committed no error. 25. We are unable to accept the contention of the petitioner that such authorities travelled beyond the scope of the show cause notice. The show cause notice was issued for rejecting the rebate claim on the ground that since the petitioner was availing benefit of Kutch Area Exemption Notification, it would not be entitled to rebate. It is true that reference to this objection was in relation to the clarification issued by CBEC in this respect. However, the petitioner itself was acutely conscious of the amendment in the Notification No.19 of 2004. It was precisely for this reason that at the very outset, in the reply to the show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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