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TMI Blog2013 (11) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... from payment of duty vide Notification No. 30/2004-C.E., dated 9-7-2004. The lower authority rejected the rebate claims on the ground of non-compliance of provisions of Rule 18 of Central Excise Rules, 2002 read with Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 as amended in as much as they have not all followed the procedure prescribed for claiming the rebate of excise duty paid on excisable goods used in the manufacture of goods exported. 3. Being aggrieved by the said order-in-original, the applicant filed appeal before Commissioner (Appeals) who upheld the impugned order-in-original and rejected the appeal. 4. Being aggrieved with the said order-in-appeal the applicant has filed this revision application under Section 35EE of Central Excise Act, 1944 before Central Government on the following grounds : 4.1 When the fact of export is not disputed the excise duty paid on excisable goods (yarn) used in the manufacture and export goods (twine) cannot be denied. The applicant submits that the following facts are not disputed : (a) That duty has been paid on the nylon yarn used in the twine exported. (b) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of duty. Further, in the CBEC's Manual of Supplementary Instructions, vide Para 3.2 of Chapter 8, it has been clarified that for the sake of convenience and transparency, input output norms under the Export Import Policy may be accepted unless there is no specific reasons for variation. In their declaration, the applicant also declared that the input output ratio is 1.02 : 1 as per SION H 406 of the Export Import Policy. The input-output ratio in this case is also not in dispute. In terms of the statutory provisions, grant of rebate is mandatory. Only thing that has to be verified by the Department is the input output ratio. Thus, when the input output norms were as per the EXIM Policy and when the Department orally asked the applicant to go ahead with the export, the applicant cannot be faulted for claiming the rebate. Further, in the absence of any communication from the Department denying the permission, it has to be inferred that the Department has granted necessary permission. 4.3 Without prejudice, the applicant submits that as regards the .observation that the procedures relating to self-sealing were not followed, the applicant submits that normally, the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 12B, the duty incidence is deemed to have been passed on to the buyer of the goods. Thus in this case, the receiver of the goods being the applicant, it is deemed that the duty paid by the manufacturer (SRF) has been passed on to the applicant. The applicant thus submits that they have borne the incidence of tax even as per Section 12B of the Central Excise Act, 1944. Thus there is no basis for the allegation that the applicant has not borne the incidence of Duty and denial of rebate claims on this ground deserves to be set aside. 4.7 Duty paid on nylon yarn used in twine exported eligible for rebate. That twine is exempted is not relevant. Rule 18 of the Central Excise Rules provide for rebate of duty paid on any goods used in the manufacture of goods that are exported. Notification No. 21/2004-C.E. (N.T.) prescribes the procedures for payment of rebate of duty paid on excisable goods used in goods exported to any country except Nepal and Bhutan. 4.8 The impugned orders proceed on the premise that since the final products are exempt from Central Excise duty, grant of rebate will result in unintended benefit of credit otherwise not entitled. This finding of the lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s neither entitled to avail Cenvat on the inputs used in exempted goods neither the same was borne by them. The impugned order is upheld by the Commissioner(Appeals). Now the applicants have filed this revision application on the grounds stated at para (4) above. They have mainly contended that when export of duty paid goods not disputed and the duty incidence is borne by the applicants rebate is admissible even if the twine (the final product) is exempted. Benefit of rebate should not be denied on technical grounds. 8. Government notes that the factual details of the case given by original authority in order-in-original para 17.3 are as under : "The procedure followed by M/s. SRF Polymer with regard to manufacture of Nylon Yarn in their name is as follows : the basic raw materials i.e., Nylon chips are imported/purchased indigenously by the Applicants and sent to M/s. SRF Ltd. for conversion into Nylon Yarn on job-work basis. However, job-work procedure is not followed on the pretext that the Applicants are not taking credit on the Nylon chips though they mention as "Job-work" in all the concerned documents. In fact both the parties i.e. the Applicants and M/s. SRF Ltd. hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 630/ - was paid under T.R.6 Challan No. 98938923, dated 26-6-2008 and the same has been verified and attested to be correct by the Superintendent of Central Excise AB2 Range vide his report O.C.No. 389/08, dated 1-12-2008. The said Nylon Yarn has been used in the manufacture of Nylon Fishnet Twine exported under ARE2 No. 03/2008-09, dated 26-7-2008." The perusal of said para reveals that in this case nylon yarn was imported by applicant directly on payment of duty (CVD) amount of Rs. 73,630/- and goods manufactured i.e. Nylon Fishnet Twine exported vide ARE-2 No. 3/08-09, dated 26-7-2008 were exported. Original authority has observed/admitted the payment of duty on raw materials and export of goods manufactured. In this case, there are only procedural violation of not following the procedure laid down in Notification No. 21/2004-C.E. (N.T.). Government notes that goods were cleared under ARE-2 form. Applicant has claimed that input-output ratio is as per Standard Input-Output Norm H-406 (SION) of EXIM Policy i.e. 1.02 : 1. CBEC Manual of Supplementary Instructions para 3.2 of Chapter 8 has clarified that for sake of convenience and transparency, input-output norms under Export-Imp ..... 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