TMI Blog2015 (1) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... ebate claim cannot be held admissible under rule 18 of Central Excise Rules 2002. - Following decision of M/s. Orchid Health Care (A division o Orchid Chemicals & Pharmaceuticals Ltd.) Versus Union of India and others [2013 (6) TMI 33 - MADRAS HIGH COURT] and assessee's own previous case - matter remanded back - Decided in favour of Revenue. - F. No. 198/206/12 & 198/10/13-RA - 142-143/14-cx - Dated:- 2-4-2014 - Shri. D. P. Singh, Joint Secretary ORDER These revision applications are filed by the applicant Commissioner of Central Excise Service Tax, Trichy against the orders-in-appeal No.104/2012 dated 24.5.12 250/12 dated 25.9.12 passed by Commissioner of Customs Central Excise (Appeals), Trichy. M/s USR Tyres- Treads (P) Ltd., Tiruchirapalli are the respondents in these cases. 2. Brief facts of the cases are as under: 2.1 R.A.No.198/206/12-RA (OIA No.104/2012) 2.1.1 M/s USR Tyres Treads (P) Ltd, Tiruchirappalli (hereinafter referred to as assessee) are holders of Central Excise Registration for the manufacture of Solid Tyre falling under CSH 40129010 of the First Schedule to the Central Excise Tariff Act, 1985 and they are the holders of EOU Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act,1944 read with Rule 18 of the Central Excise Rules,2002 and disallowed an amount of ₹ 53,085/- stating that Cenvat Credit was wrongly taken on the inputs MS Channels, Plates and SM Bars are falling under Chapter 72. However the Deputy Commissioner has issued protective demand under C.No.V/Ch.40/18/19/2009-Rebate dated 23-05-2011 stating that till such time the appeal filed by the Department reaches finality, the amount of ₹ 2,10,306/- sanctioned as rebate is to be held as erroneously refunded. 2.1.5 Against the Order-in-Original No.05/2011 of Deputy Commissioner, the assessee filed appeal before the Commissioner (Appeals), Tiruchirapalli. Commissioner (Appeals) held in his order-in-appeal No. 104/2012 dated 24.05.2012; that out of an amount of ₹ 53,085/- taken wrongly as Cenvat Credit on MS Channels, Plates and SM bars the assessee are eligible to claim rebate in respect of Plates only as it was utilized by the assessee in the manufacture of hub rims. 2.2 R.A.198/10/13-RA (OIA No.250/12) 2.2.1 M/s USR Tyres Treads (P) Ltd, Tiruchirappalli (the assessee) are holder of Central Excise Registration for manufacture of solid tyre falling under CSH 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of lower authority. 3. Being aggrieved by the impugned orders-in-appeal, the applicant department has filed these revision applications under Section 35 EE of Central Excise Act, 1944 before Central Government on the following grounds: 3.1 Grounds in R.A.No.198/206/12-RA 3.1.1 In Para 4 of order-in-appeal, Commissioner(Appeals) has erroneously held that the assessee have manufactured hub rims for the solid tyres from the Plates purchased by them and therefore the assessee are eligible to claim rebate in respect of Cenvat Credit availed on Plates. Commissioner(Appeals) failed to note that the assessee are a 100% EOU manufacturing Solid Tyres falling under Chapter 40 of Central Excise Tariff Act 1985 and their inputs used are Carbon Block, Reclaimmed Rubber, Rubber Chemicals and Zinc Oxide. The use of MS Channels, Plates and SM Bars are in no way connected with the manufacture of their Final Product viz. Solid Tyres . Therefore the Lower Authority has rightly disallowed the rebate claim in respect of Cenvat Credit wrongly taken on MS Channels, Plates and SM Bars to the tune of ₹ 53,085/- in Para 4(v) and 7 of o-in-o No. 05/2011-Rebate dated 01.03.2011. 3.1.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the EOU is not at all required to pay the duty on goods manufactured and exported by them and therefore the assessee is not legally entitled to avail a non-existent option of paying duty. 3.2.2 Ministry, of Finance vide letter F.No.209/26/2009-CX.6 dated 23.4.2010 too clarified that Notification No.24/2003-CE dated 31.3.2003, provides absolute exemption to the goods Manufactured by EOU. Therefore, in terms of Section 5A (1-A) of Central Excise Act, 1944, EOUs do not have an option to pay duty and thereafter claim rebate of duty. paid. When this clarification is binding on the department, the Commissioner (Appeals) totally ignored Board's clarification as above and allowed the assessee's appeal. 3.2.3 The Commissioner (Appeals) traversed beyond the scope of Appeal Memorandum filed by the assessee and brought in a new point viz. utilization of accumulated credit for payment of duty by EOUs, in the discussion, citing Circular No.799/32/2004-CX dated 23.9.2004. It is pertinent to point out that the assessee had not claimed refund of accumulated u/r 5 of CCR, 2004 at the outset, which is governed by Notification No.5/2006-CE(NT) dated 14.3.2006 as amended, subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Chennai was attended by Shri M. Karthikayan, Advocate on behalf of the respondents who reiterated the findings of Commissioner (Appeals) given in the impugned orders-in-appeal. 6. Government has carefully gone through the relevant case records written submissions and perused the impugned orders-in-original and orders-in-appeal. 7. On perusal of records Government observes that the applicant department has stated that said application may be decided alongwith their revision application No.198/661/2011-RA-Cx filed against OIA No.186/2010 dated 18.10.10 as the issue involved is same relating to admissibility of rebate claim under Rule 18 of Central Excise Rules 2002 read with Notification No.19/04-CE(NT) dated 6.9.04 to the 100% Export Oriented Units. It is noted that-said revision application is already decided vide GOI Revision Order No.26-27/14-Cx dated 19.2.14. The operative portion of said order is as under: 9. On perusal of records Government observes that the adjudicating authority rejected the rebate claim on the :'ground that in terms of Section 54(1A) of Central Excise Act, 1944 absolute exemption ; /s available to the applicant being a 100% EOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisable goods from the whole of the duty of excise leviable thereon has been granted absolutely the manufacturer of such excisable goods shall not pay the duty of excise on such goods 10.3 The Notification No. 24/03-CE dated 31-03-2003 was issued under section 5A(i) of Central Excise Act 1944. The goods manufactured by 100% EOU and cleared for export are exempted from whole of duty unconditionally. Therefore in view of provisions of subsection (1A) of section 5A, the applicant manufacturer has no option to pay duty. Government notes that there is no condition for availing exemption from payment of duty on goods cleared for exports Normally the 100% EOU has to clear goods for exports as per the EOU scheme. Since there is no condition in the notification for availing exemption to goods manufactured by 100% EOU and cleared for export, the provisions of sub section (IA) of section 5A(1) are applicable and no duty was required to be paid on such export goods Government finds support from the observations of Hon ble Supreme Court in the case of M/s ITC Ltd. Vs CCE reported as 2004 (171) EL T 433 (SC), and M/s Paper Products Vs CCE reported as 1999 (112) EL T 765 (SC) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral excise (Appeals), Mumbai III. Government further observes that similar findings were given in GOI Revision Order No.1624/11-CX in the case of Orchid Health Care (100% EOU), Tamilnadu. Party challenged the said order in WP. No. 5667/12 before Hon ble High Court of Madras who vide order dated 30.11.12 has decided the matter against the department and allowed the rebate claim. The Commissioner, Central Excise Chennai IV filed WP No 260113, MP No.1/13 against the said order dated 30.11.12 before Hon ble High Court of Madras (Double Bench) who vide order, dated 14.2.13 have stayed the order dated 30.11.12. As per available records the said writ petition is still pending for final decision. 12. Government notes that the issue is required to be decided in the light of final judgement of Hon ble High Court of Madras Therefore Government sets aside the impugned orders and remands the case back to the original authority for deciding the issue afresh, in the light of final order, of Hon ble High Court of Madras pending WP No.260/13 filed by department in the case of M/s Orchid Healthcare. A reasonable opportunity of personal hearing will be afforded to both the parties b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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