TMI Blog2013 (11) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... or variation. substantial benefit of rebate should not be denied for procedural infractions - thus input rebate claim is admissible in respect of duty paid on materials used in the manufacture of goods exported, subject to the condition that input-output ratio does not exceed the SION Norms and there are no other reason for variation - The original authority is directed to sanction the said input rebate claim subject to compliance of conditions – Decided in favour of Applicant. - F.No. 195/253/2011-RA - Order No. 199/2013-CX - Dated:- 6-3-2013 - Shri D.P. Singh, J. Shri V. Pranchanathan, Advocate and K. Sankara Narayan, DGM Material, for the Assessee. Shri P. Jaykumar, Superintendent, for the Department. ORDER This revision application is filed by the applicant M/s. SRF Polymers Ltd., Chennai against the Order-in-Appeal No. 67/2010(M-I), dated 29-12-2010 passed by the Commissioner (Appeals) Central Excise, Chennai with respect to Order-in-Original No. 23/09/R, dated 11-5-2009 passed by Deputy Commissioner of Central Excise, AB Division, Chennai-I Commissionerate. 2. Brief facts of the case are that the applicants had filed two rebate claims for Rs. 1,50,240/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the inputs; (b) At the time of clearance, the applicant has not followed the procedure prescribed for self-sealing; (c) With regard to the export vide ARE2 No. 03/2008-09, no declaration was filed and procedures were not followed. On these allegations, the impugned orders hold that the applicant have not fulfilled the conditions prescribed under Notification No. 21/2004-C.E. (N.T.) and thus, contravened the provisions of Rule 18 of the Central Excise Rules, 2002. In this regard, the applicant submits that they had submitted a letter dated 8-5-2008 to the Deputy Commissioner of Central Excise seeking permission to avail rebate on excisable goods used in the aforesaid export product. It was clearly stated in the said letter that the Input-Output ratio is as per provision H-406 of the Standard Input Output Norm (SION) of the Exim Policy. The applicant also informed that a consignment was to be exported to Uganda by 10-5-2009 and the representative of the applicant company also met the Deputy Commissioner of Central Excise. The applicant further submits that the relevant Notification No. 21/2004-C.E. (N.T.) requires the Assistant/Deputy Commissioner to verify the Inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son Chemicals - 2006 (200) E.L.T. 175 (G.O.I.). 4.5 The presumption that the applicant has not borne the incidence of duty itself is incorrect. In the present case, SRF paid duty on the Nylon yarn manufactured by them and collected the same from the applicant. Even though the transaction is between related persons, the entire transaction is accounted for in their respective books of accounts. For the Central Excise duty so paid by SRF, they raised debit notes on SRF and SRFP paid the same by way of adjustments in their books of accounts. Thus, the fact remains that Central Excise duty remains collected from the applicant and as such they have borne the incidence of duty. 4.6 The Applicant submits that it has obtained Nylon Yarn from SRF under a valid excise invoice wherein SRF has discharged the excise duty liability for the manufacture of Yarn. Using this input, the Applicant had manufactured Twine and exported. Thus, the duty paid on the input is sought as input rebate under Rule 18 of the Central Excise Rule, 2002. The Applicant is claiming rebate on the duty paid on the input used, i.e., Nylon Yarn. SRF is the manufacturer of the Nylon Yarn and the applicant is the receiver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fishnets. The Applicant did not avail credit of the duty paid on yarn. In the circumstances, the question of ineligible credit does not arise. 5. Personal hearing scheduled in this case on 13-12-2012 at Chennai was attended by Shri V. Panchanathan, Advocate Shri K. Sankara Narayan, DGM Material on behalf of applicant who reiterated the grounds of revision application. Shri P. Jaykumar, Superintendent appeared on behalf of the respondent-department who submitted that the order-in-appeal being legal and proper may be upheld. 6. Government has carefully gone through the relevant case records and perused the impugned order-in-original and order-in-appeal. 7. On perusal of records Government observes that the original authority rejected the rebate claim on the ground that the final product viz. Nylon Fishnet Twine was exempt from payment of duty and hence the applicants were not eligible for credit of duty paid on the base raw materials i.e. Nylon Chips. They had cleared the same directly to their sister unit without taking Cenvat credit for job work to enable M/s. SRF Ltd. to take the credit and their sister concern did so. He observed therefore that the applicants/job worker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports through Merchant exporters the person who is not claiming rebate i.e., either the manufacturer or merchant exporter will file a disclaimer certificate, to the effect that they do not claim the refund/rebate. In the instant case the export involves only the Applicants and no through M/s. SRF Ltd. From above details it becomes clear that the basic raw material Nylon Chips were sent by applicant to M/s. SRF Ltd. for conversion into Nylon Yarn on job work basis who availed Cenvat credit of duty paid on Nylon Chips. Applicant is claiming input rebate of duty paid on raw materials by M/s. SRF. Original Authority has observed that applicant has not paid any duty on Nylon yarn. So, in case of invoices stated in para (6) of order-in-original where no duty is paid by applicant, the input rebate is rightly held inadmissible. 9. Government notes that original authority has observed regarding export of goods vide ARE-2 No. 3/08-09, dated 26-7-2008 in para 17.7 of order- in-original as under : Regarding the 4th entry as mentioned in table at para 6, the Nylon Yarn was imported by the Applicants under Bill of Entry No. 777190 dated 26-6-2008 directly and the Duty amount of Rs. 73,63 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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