TMI Blog2014 (1) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that facility has not been availed in case of inputs/raw materials under Rule 18 and Rule 19(2) and after amendment it explicitly provided for the same i.e. facility has not been availed in case of inputs/raw materials under Rule 18 and Rule 19(2) - only bar is in case of rebate taken on inputs/raw materials used in case of Rule 18 also as in the case of Rule 19. So far as the contention of the department that Notification 93/2004 has been issued in the context of imports under Advance Licence/Advance Authorisation. The Notification 93/2004 exempts material imported from whole of duty of Customs, whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon respectively, under Sections 3, 8 and 9A of the Customs Tariff Act, 1975; and similarly, Notification 94/2004 also exempts material from whole of the duty of Customs and whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975. In these circumstances, who avails advance licence on annual basis on actual user condition cannot be put at disadvantage vis-a-vis one who avails facility of advance licence on consignment basis. Benefit of Notification No. 94/2004 is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings against the appellant. The ld. Commissioner adjudicated the case and disallowed the benefit of the Notification confirmed the demand of duty of Rs. 18,43,63,825/- under Section 28 of the Customs Act, 1962 along with interest and ordered for confiscation of goods valued at Rs. 93.44 crores and imposed redemption fine of Rs. 18.69 crores, since the goods were not available for confiscation. He also imposed penalty of Rs. 5,53,09,058/- under Section 114A of the Customs Act, 1962. Aggrieved by the same, the appellant filed this appeal. 4.1 The contention of the appellant is that Notification 94/2004 exempts the material imported under annual advance authorization. Material is defined in the Notification as goods used in the manufacture of goods cleared for export. The contention is that condition No. 8 stipulates that certain benefit should not have been availed under Central Excise Rules, it can only be referring to excise duty benefit being availed on the material i.e. input used in the manufacture of exported goods. It is illogical to visualize that Notification granting exemption from customs duty on input, but stipulates as a condition about non-availment of benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct which . as appearing in Condition No. 8 of Notification No. 94/2004-Cus. is a common prefix for the expression facility under Rule 18 or sub-rule (2) of Rule 19 of Central Excise Rules, 2002 as mentioned in the above para, the facility under sub-rule (2) of Rule 19 of Central Excise Rules, 2002 is with reference to procurement of raw materials without payment of duty. Hence, the facility under Rule 18 which follows the common prefix in respect of would also refer to the rebate of duty paid on the raw material used in the manufacture of resultant product exported. The facility under sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 mentioned in condition No. 8 is procurement of raw material without payment of duty. Hence the facility under Rule 18 as mentioned in the above Condition No. (8) of Notification No. 94/2004-Cus., would also refer to the rebate of duty paid on the raw material used in the manufacture of resultant product exported and not the rebate of duty paid on the resultant product exported. 4.4 The contention is that earlier Notification No. 203/92-Cus., dated 19-5-1992 granted exemption in respect of the materials imported against the value based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification for advance authorizations for annual requirements. It barred only benefit of Rule 12(1)(b) or Rule 13(1)(b) of Central Excise Rules, 1944. 4.8 The contention is that under annual advance licence scheme, single licence is given based on the annual requirement of raw materials for the eligible exporter. This is procedural relaxation of the most clerical type announced in April 1999 Edition of the policy as a simplification of procedure. Otherwise the annual advance licence scheme is identical to the advance licence scheme in content and objects. 4.9 The contention is that Notification No. 48/99-Cus., dated 29-4-1999 is the consequential notification issued by the Government of India under Customs Act for granting exemption to materials imported against the annual advance licence. Schedule to the Notification prescribed that the importer of the raw material should give a declaration that no benefit under Rule 12(1)(b) or Rule 13(1)(b) of the Central Excise Rules, has been availed in respect of exports made under this duty exemption entitlement certificate. 4.10 The contention is that the annual advance licence would enable the exporter to import any prescribed inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled. In Rule 19, separate sub-rules (1) and (2) exist for final product duty and input duty. In Rule 18, both rebate of final product duty and input duty are dealt with one sub-rule/Rule 18. This position cannot be ignored. Rule 19 of the Central Excise Rules has separate sub-rules 19(1) and 19(2) to provide for the benefit in respect of final product exported and the raw material to be procured without payment of duty respectively. Therefore the legislature has specifically mentioned in Condition No. (8) of Notification No. 94/2004-Cus., the sub-rule 19(2) of Central Excise Rules, 2002. However, there are no sub-Rules, in Rule 18 of the Central Excise Rules, separately dealing with the rebate of duty paid on the material used in the manufacture of goods cleared for export and rebate of duty paid on the goods exported. Both are dealt with in Rule 18, Therefore, when the expression facility under Rule 18 .. appears in Condition No. (8) of Notification No. 94/2004-Cus., along with the expression Facility under Rule 19(2) of the Central Excise Rules, 2002 , it can only be interpreted to mean the facility of rebate of duty paid on the raw materials used in the manufacture of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 18 or Rule 19(2) of the Central Excise Rules, 2002. Rule 18 provides for rebate of duty paid on the manufactured excisable goods and rebate of duty paid on the materials which are used in the manufacture of such export goods. Rule 19(2) provides for removal of any material without payment of duty from a factory of a manufacturer or a warehouse or any other approved premises, for use in the manufacture of goods which are exported. So far as the contention of the appellant is bar is only in respect of availment of input stage rebate and not final product rebate, this appears to be misreading of Condition No. (8) of the Notification No. 94/2004-Cus., ibid. The contention is that the support taken by the appellant from Notification 93/2004 ibid wherein the Condition (v) of the Notification is similar to Condition (8) of Notification 94/2004 ibid. According to the appellant, by realising the drafting mistake in Condition No. (v), the Ministry has corrected it by issue of a corrigendum dated 17-5-2005 by insertion of the words in bracket after Rule 18 (rebate of duty paid on materials used in the manufacture of resultant product). 5.2 The contention is that similar correction has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in CCE v. Bhilwara Spinners Ltd. reported in 2011 (269) E.L.T. 384 wherein sanction or otherwise of rebate under Rule 18 of the Central Excise Rules, 2002 was not an issue. Therefore, the reliance placed on the aforesaid citation is not relevant. The contention is that in their case the Revisionary Authority, Govt. of India in the case of Alcobex Metals Ltd. - 2013 (291) E.L.T. 129 (G.O.I.) is more appropriate wherein it was held that amendment to Notification 93/2004 ibid has no application to the Notification 94/2004 ibid. Thus the Condition No. (8) of the Notification No. 94/2004-Cus., is not complied and therefore the benefit under the Notification cannot be extended to the appellant. The contention is that the appellant requested the department to issue Corrigendum to Notification 94/2004 ibid similar to the one in respect of 93/2004. The contention is that once they have applied for issue of Corrigendum it shows that they were aware of the restriction imposed under Notification 94/2004 ibid. Accordingly, they should have waited for the amendment without availing any facility of Rule 18 of CER 2002. 5.4 The contention is that the appellant submitted EODC issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner. (2) Any material may be removed without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be approved by the Commissioner. (3) The export under sub-rule (1) or sub-rule (2) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board. From conjoint reading of the above Rules, we find that both the rules provides for 2 facilities each as under - (i) Facilities under Rule 18 :- (i) rebate of duty paid on finished excisable goods, and (ii) rebate of duty paid on materials used in the manufacture or processing of such goods. (ii) Facilities under Rule 19 :- (i) Finished excisable goods can be cleared under bond without payment of duty, and (ii) Raw material can be obtained without payment of duty. 1st part of Rule 18 which provides for rebate of duty on finished excisable goods is akin to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xporting resultant products, manufactured in India which are specified in the said licence or authorisation and in respect of which facility under Rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 has not been availed. Undisputedly, the Condition (v) prior to amendment was similar to Condition (8) of Notification 94/2004 ibid. As already discussed that the emphasis so far as rebate taken on Rule 18 is concerned, the same relates to inputs/material under Rule 18 or Rule 19(2). In this manner, prior to amendment the condition implicitly provided that facility has not been availed in case of inputs/raw materials under Rule 18 and Rule 19(2) and after amendment it explicitly provided for the same i.e. facility has not been availed in case of inputs/raw materials under Rule 18 and Rule 19(2). 6.3 Thus the only bar is in case of rebate taken on inputs/raw materials used in case of Rule 18 also as in the case of Rule 19. So far as the contention of the department that Notification 93/2004 has been issued in the context of imports under Advance Licence/Advance Authorisation. The Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple example. 16. If an excisable commodity like Sewing Machine is exported from a bonded warehouse under Rule 13 under a bond it may not have to bear excise duty till it is exported. But if the same commodity namely, sewing machine is cleared ex-factory gate on payment of full excise duty and thereafter it is exported and if it is covered by a notification under Rule 12(1) granting rebate then only because the same commodity is first cleared from factory gate on payment of full duty, it will have to bear a reduced excise duty as per the notification on proof of export while the same commodity if placed in a bonded warehouse and then exported may get totally exempted from duty. If say for such a sewing machine the excise duty is Rs. 100 per machine, and on proof of export if 20% rebate is to be available then proof of export of such machine after payment of Rs. 100 excise duty would entitle the exporter to get refund of Rs. 20 and such machine may have to bear the excise duty of Rs. 80. While if the same sewing machine which otherwise is liable to pay Rs. 100 excise duty is placed in a bonded warehouse by availing the facility of deferred payment of duty under bond as per Rule 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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