9911796707
TMI Blog2015 (3) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... p; The details of the Rebate Claims filed by the claimant:- Sr. No. RC-No. RC-Date ARE I No and Date Manufacturer from whom the capital Goods obtained Amount of Rebate claimed 1 27857 23/03/2007 03 22/08/2206 FCL Technology & Products Ltd. 3,70,331 2 668 12/04/2007 01 21/07/2006 Rotatex Polyster 72,000 3 669 12/04/2007 02 21/07/2006 Raj Rayon 2,26,200 4 670 12/04/2007 01 21/07/2006 Raj Rayon 3,36,000 Total 10,04,5311 On perusal of above said 4 rebate claims, it is observed that, they have filed rebate claims of Central Excise duty paid on removal of 'capital goods as such'. In this case, the claimant is a merchant exporter and they have purchased 'used capital goods' from the above said manufacturer. The above said manufacturer has removed subject capital goods 'as such' from their factory which is not manufactured by them. The above said manufacturers are 'registered under Central Excise Acts for Manufacture" of 'Polyester Texturised Yarn' under rule 4 of Cenvat Credit rules, 2004. In this regard, a Deficiency Memo-cum-SCN-call for personal hearing was gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing but payment of duty. 4.2 The applicant had cleared and tfie exported capital goods (Excisable goods) as such from the factory, on reversal of Cenvat credit, in terms of rule 3(5) of CENVAT Credit Rules 2004. Under Rule 3(6) of CENVAT Credit Rules 2004, any reversal of CENVAT Credit Under Rule 3(5) is treated as payment of duty. Hence in other words/whatever amount reversed Under Rule 3(5) is payment of duty only. 4.3 The manufacturer had cleared the capital goods for export under the cover of Central Excise invoice and an amount equal to credit availed was paid according to the provision of Rule 3(5) of Cenvat Credit Rules, 2004. Further, as per Rule 3(6) of Cenvat Credit Rules, 2004 the amount paid under sub-rule (5) should be the goods, under the cover of Central Excise invoice, are eligible to take CENVAT Credit of the amount paid under sub-rule (5). In view of above legal position of law the reversal of CENVAT Credit under Rule 3(5) of Cenvat Credit Rules, 2004,at the time of clearance of Capital goods from the factory is payment of duty under Section 3(1) of Central Excise Act, 1944. Hence, the finding is legally not sustainable. 4.4& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia No.356/07 dated 27.06.2007 under F.No.198/368/06-RA. Vide the above Ruling the Joint Secretary has decided that if duty has been paid on goods exported as such then rebate shall be granted equal to the Cenvat Credit taken on the inputs or capital goods. * In the Matter of M/s Century Enka Ltd., Pune (GOI Order No.1706/10-CX dt. 23.11.2010 under RA file No.195/542/09-RA), the Joint Secretary has held that debited made in terms of Rule 3(4)(b) & 3(5) of Cenvat Credit Rules, 2004 on removal of inputs as such is to be treated as Payment of duty of excise for the purpose of Rule 18 of the Central Excise Rules, 2002 read with the notification issued thereunder. * In the matter of M/s Chiripal Industries Ltd., Ahmedabad (Govt. of India Order No.1658/10-Cx dt. 01.11.2010 issued under RA file No.195/99/08-RA-CX), the Joint Secretary has held that duty/Cenvat credit reversed in terms of erstwhile Rule 3(4) of Cenvat Credit Rules 2004 is to be treated as payment of duty for the purpose of Rule 18 ibid read with notification issued thereunder. 6. Personal hearing scheduled in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported directly from the factory of the manufacturer as contemplated under Notification No.41/94 dated 12/9/1994, Circular No.294/97 dated 30/1/1997 and Notification No.19/2004 dated 6/9/2004 and, therefore, the rebate claim is liable to be rejected Thirdly, the capital goods imported by the assessee have been used by the assessee for several years and, therefore, the export of capital goods cannot be said to be "removed as such" as provided under Rule 3(5) of the Cenvat Credit Rules, 2004. 5. We see no merit in the above contention. Reversal of input credit is one of the recognized method for paying duty on the final product. In fact, the Central Government by its circular No.283 dated 31/12/1996 construing similar provisions contained in Rule 57F of the Central Excise Rules, 1944 held that where the Inputs are cleared on payment of duty by debiting RG-23A Part II as provided under erstwhile Rule 57F4 of the Central Excise Rules, 1944, the manufacturer would be entitled to rebate under Rule 12 (1)(a) of the Central Excise, 1944. Rule 57F in the 1944 Rules is par/ materia to Rule 3(5) of Cenvat Credit Rule, 2004. Similarly, Rule 12(1)(a) of the 1944 Rules is pad mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently does not affect the right of the assessee to claim rebate of duty paid on export of such capital goods. 9. For all the aforesaid reasons, we see no merit in the petition and the same is hereby dismissed with no order as to costs." Government notes that ratio of said judgement is squarely applicable to this case as the facts of instant case and that of cited case are identical. 10. Government notes that Hon'ble Supreme Court has held in the case of UOI Vs. Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433-SC that orders of appellate authority are to unreservedly followed by subordinate authorities unless the operation of the same has been stayed by--competent court. In this case, no stay is granted by Hon'ble Supreme Court. Government also notes that SLP No. 6120/12 filed in Supreme Court by department against Bombay High Court order dated 24.03.2011 in W.P. No. 2094/,10 in the case of Sterlite Industries India Ltd. is also dismissed vide order dated 14.09.2012 whereas SLP filed against order dated 23.3.11 in the case Micro Ink Ltd. is still pending. The ratio of above said judgement is squarely applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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