TMI Blog2015 (3) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of duty i.e. 4% or 5% in terms of Notification No. 4/06-CE dated 1.03.06 as amended, as applicable on the relevant date on the transaction value of exported goods determined under section 4 of Central Excise Act, 1944. - Decided against the assessee. Allowing the manufacturer to avail re-credit of the amount paid in excess - revenue contended that manufacturers have already recovered excess duty from its buyer M/s Cipla Ltd., Mumbai and allowing re-credit of excess paid amount in the cenvat credit account of manufacturer will lead to additional benefit to the manufacturer which will amount to unjust enrichment. - Held that:- The factual position is to be verified by the original authority from records. Government notes that in these cases claimant is a merchant exporter and duty on exported goods is paid by manufacturer. So, the re-credit of excess paid amount is to be allowed as ordered by Commissioner (Appeals),, only if the provisions of section 12B of Central Excise Act 1944 are complied with. - Decided in favor of Revenue. - F. No. 195/447, 449-455, 464-467, 472-479, 480-482, 486, 644, 645-652/13-Cx & 198/19-37,44-47,55,57-65/13-RA - 160-225/2014-CX - Dated:- 28-4-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BC/658//M-III(R)/12-13 dated 25.3.13 -do- 42 198/57/13 CCE Mumbai-III -do- -do- 43-50 195/645-652/13 M/s Cipla Ltd., Mumbai BC/659-666//M 111/12-13 dated 25.3.13 -do- 51-58 198/58-65/13 CCE Mumbai-III BC/659-666//M 111/12-13 dated 25.3.13 -do- 59-62 198/44-47/13 -do- BC/505 to 508/M-Il1/12-13 dated 17.01.13 -do- 63-66 195/464-467/13 M/s Cipla Ltd., Mumbai -do- -do- 2. Common brief facts of these cases, are that the applicant M/s Cipla Ltd, a merchant exporter filed rebate claims of duty paid on exported goods under Rule 18 of the Central Excise Rules,2002 read with Notification No. 19/2004-CE(NT) dated 06.09.2004. The manufacturers had paid duty on said exported goods @ 10% under Notification No. 2/08-CE dated 01.03.2008 as amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the applicant by the order of this Court in Collector of Central Excise, Baroda V Indian Petro Chemicals [1997 (92) EL T 13]. Where there are two exemption notifications that cover the goods in question, the assessee is entitled to the benefit of that exemption notification which gives him greater relief, regardless of the fact that that notification is general in its terms and the other notifications is more specific to the goods. (ii) They also further referred and relied on following decision of Supreme Court, High Court and CESTAT for this proposition - (a) 1997 (92) ELT 13 (SC) - CCE vs. Indian Petro Chemicals, (b) 1991 (53) ELT 347(T) - Indian Oil Corporation Ltd. vs. CCE (c) 1990 (47) ELT 7 (T) - Coromandal Prints Chemicals vs. CCE (d) 1989 (44) ELT 500 (T) - Dunbar Mills Ltd. vs. CCE (e) 1985 (22) ELT 574 (T) - Calico Mills vs. CCE, (f) 2009 (242) ELT 168 - Coca-cola Ltd. vs. CCE, (g) 2007 (209) ELT 321 (SC) -Share Medical Care vs. UOI (h) 1998 (108) ELT 213 - CCE vs. Cosmos Engineers (i) 2003 (160) ELT 1150 - CCE vs. Thermopack Industries (j) 1996 (83) ELT 123 (T) -Gothi Plastic Industries vs. CCE. 4.1.4 Notification No. 4/2006 Notification No. 2/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exported after payment of duty. The fact that the goods which have been exported and have suffered excise duty is also not in dispute. (iii) The CESTAT in the case of Gayatri Laboratories vs. CCE 2006 (194) ELT 73 (T) held that rebate claim to the extent of duty paid is available and that the rebate claim cannot be restricted on ground that less duty should have been paid in terms of Notification. 4.1.6 Rebate sanctioning authority cannot question the assessment. It is well settled that rebate, sanctioning authority cannot question the assessment of export consignment. As to-how much duty ought to be paid is beyond the jurisdiction and realm of a rebate sanctioning authority. Hence, the impugned portion of the order-in-original is liable to be set aside. It is well settled that there is no estoppel in taxation. Hence, the fact that the applicants were availing Notification No. 4/2006-CE dated 1.03.06 in past is irrelevant for the present dispute. 4.2 Grounds in Revision Application of F Nos 198/19-37, 44-47, 55, 57-65/13-RA filed by department i.e. CCE Mumbai-III :- 4.2.1 In the impugned Orders-in-Appeal the Commissioner (Appeals) has allowed the excess duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been born by us. We are submitting herewith some copies of Job work bill and declaration obtained from our supporting manufacturer. 4.3.3 Where we have dispatched goods for export from our own manufacturing unit we are having status of 'manufacturing exporter', and in such cases there is no question of passing the duty incident as duty is paid by us only. Also, the applicant in his application has not considered this fact where we have status of manufacturer exporter. The said matter is already been decided by your office vide order No. 1318-1329/2013-CX dated 15.10.2013. Vide said order your office has held that The amount of duty paid in excess of duty payable at effective rate of 4% or 5% is to be treated as voluntary deposit made by manufacturer with Government. The excess paid amount may be allowed to be re-credited in the cenvat credit account of the manufacturer subject to the compliance of the provision of section 12B of Central Excise Act, 1944 . Though, we have not taken the cenvat credit against the said order but the direction of Revisionary Authority of. allowing the cenvat credit under provision of Section 12B is acceptable to us only in respect where we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to be paid on exported goods at the effective rate of duty @ 4%/5% in terms of Notification No. 4/2006-CE dated 01.03.2006 as amended and sanctioned the rebate claims to the extent of duty payable @ 4%/5%. In appeal Commissioner (Appeals), modified the impugned Orders-in-Original and allowed the recredit in cenvat credit account of the amount rejected as rebate. Now, both M/s Cipla Ltd. as well as department have filed revision applications against the same Orders-in-Appeal on the grounds stated above. 8. M/s Cipla Ltd. had has contended that both the said notifications has approval of Parliament and therefore they are at liberty to avail any notification which ever they find beneficial to them. Therefore they have claimed themselves to be eligible to rebate of duty paid on export goods @10% in terms of Notification No. 2/08-CE dated 1.03.08 as amended. 8.1 It is observed that Central Government issued Notification No. 2/08-CE dated 1.03.08 which has an effect of reduction in general rate of Central Excise Duty on various products from 16% to 14%. Thereafter, this notification was amended by Notification No. 58/08-CE dated 7.12.08 reducing the said general rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been carried out by notification, the possibility of the same product/ item being covered by more than one notification cannot be ruled. In such a situation, the rate beneficial to the assessee would have to be extended if he fulfils the attendant conditions of the exemption. 3. Drugs and Pharmaceuticals 3.1 Excise duty on drugs and pharmaceuticals falling under Heading Nos. 3001, 3003 (export Menthol crystals), 3004, 3005 and 3006 (except 3006 60 and 3006 92 00) has been reduced from 16% to 8%. Thus, the general effective rate for all goods of Chapter 30 is now 8%. However, certain specified items such as life saving drugs continue to be fully exempt. Excise duty has been fully exempted on Anti-AIDS drug ATAZANAVIR, and bulk drugs for its manufacture. The Joint Secretary (TRU) CBEC has made it amply clear that reduction in General Tariff Rate has been carried out by Notification and therefore there could be a possibility-of same item being covered by two notifications and directed that the rate beneficial to assessee may be extended:' In the instant case, the applicant has availed both the rates of duty, which is not allowed in TRU letter. Here basically the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... currently 8 per cent. I have reviewed the list of items currently attracting the rate of 4 per cent, the only rate below the mean rate. There is a case for enhancing the rate on many items appearing in this list to 8 per cent, which I propose to do, with the following major exceptions: food items; and drugs, pharmaceuticals and medical equipment. Some of the other items on which I propose to retain the rate of 4 per cent are : paper, paperboard their articles; items of mass consumption such as pressure cookers, cheaper electric bulbs, low priced footwear, water filers / purifiers, CFL etc.: power driven pumps for handling water and paraxylene. Further, the Hon'ble Finance Minister in his speech while presenting the Union Budget for 2010-11 in the Parliament stated that : PART B INDIRECT TAXES 142. Unlike the time I presented the last Budget, symptoms of economic recovery are more widespread and clear-cut now. The three fiscal stimulus packages that the Government introduced in quick succession have helped the process of recovery significantly. The improvement in our economic performance encourages a course of fiscal correction even as the global si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue will have to be examined in the light of these instructions. As explained above, Notification No. 2/08-CE dated 1.03.08 as amended prescribed General Tariff rate of duty @10% which was in fact brought down from 16% to 14% and then to 8% and finally to 10% by different amending notifications. The notification No. 4/06-CE dated 1.03.06 as amended prescribed effective rate of duty from initial rate of 0% to 8%, 8% to 4% and finally to 5% by different amending notifications. As such it is not correct to say that it is a case of applicability of two notifications only and assessee is at liberty to choose any one notification which is beneficial to him. In this case, notification No. 2/08-CE as amended provided for General tariff rate of duty and Notification No. 4/06-CE as amended provided for effective rate of duty and they have to be strictly construed as such. Therefore they have, to be .read together as stipulated in para 4.1 of, Part-I of Chapter 8, of CBEC Excise Manual. In fact, this confusion has arisen since in this case the General tariff rate was reduced through Notification when special economic stimulus package was announced in 2008 by Government to deal with on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment upholds the applicability of above said CBEC Instructions in this case. 8.7 M/s Cipla Ltd. has relied upon number of case laws to the proposition that it was upto the assessee to choose a notification which is most beneficial to him. Government notes that in the cases cited namely CCE Baroda vs. India Petro Chemicals and HCL Ltd. vs. CC New Delhi, Hon'ble Supreme Court has held that when two notifications co-exit simultaneously, then assessee has the option to choose any one of the notifications beneficial to him. Hon'ble Apex Court has categorically held that in such a situation assessee has option to choose any one notification. Apex court has not stated that assessee can avail both the notifications simultaneously. Whereas in the instant case applicant has not chosen one notification for all the clearance but decided to avail benefit of both the notification. The apparent motive of clearing export goods at higher rate of duty @10% and goods for home consumption at 4% is to encash the accumulated cenvat credit. In terms of above said judgements also, the applicant is required to choose one notification whereas he has acted otherwise. Moreover, the said judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by statute, it has statutory force and validity and therefore exemption under notification is, as if it were contained in the Act itself. Apex Court has clearly observed that any exemption notification specifying effective rate has to be complied with. In this regard, Hon'ble CESTAT Ahmedabad Bench in its judgement in the case of Mahindra Chemicals vs. CCE Ahmedabad 2007 (208) ELT 505 (T. Ahd.) while relying on above said Apex Court judgement has held that exemption notification has to be construed as if this rate was prescribed by statute and when the legislature has decided to exempt certain goods by notification, the exemption cannot be negated by an assessee by opting for payment of duty. 8.8.2 Hon'ble Supreme Court has also held in the case of M/s Belapur Sugar and Allied Industries Ltd. vs. CCE 1999 (108) ELT 9 (SC) that even if duty paid under ignorance of law or otherwise, the rebate cannot be refused since party has paid the duty. Further, Hon'ble Apex Court has held that if the duty paid shown to be not leviable or entitled for rebate, the revenue has to refund, adjust, credit such amount to the assessee as the case may be. 8.8.3 Government also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multaneously. However, the manufacturer should maintain separate books of account for goods availing Notification No. 29/04-CE and for goods availing Notification No. 30104-CE In this case, both the Notifications prescribed effective rates of duty. Notification No. 30/04-CE prescribed nil rate of duty provided manufacturer does not avail cenvat credit on inputs. This clarification does not say that duty can be paid at tariff rate when the exemption notification is existing. Simultaneously availment of these notifications is allowed in the said circular as they pertain to different situation like whether he is availing cenvat credit or not. This circular is of no help to the applicant as in their case there are no two conditional notifications prescribing two effective rates. Moreover, there is no such circular issued in case of pharmaceutical products pertaining to Notification in question allowing their simultaneous availment. The other Circular No. 937/27/2010-CX dated 26.11.10 is not applicable as in the instant case there is no applicability of provisions of Section 5A(1A) of Central Excise Act, 1944. 8.10 Government observes that the. M/s Cipla Ltd. has relied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible to the extent of duty payable at effective rate of duty @ 4% or 5% as the case may be and not of duty paid at the tariff rate of duty. The ratio of said decision is squarely applicable to these cases. 9. In view of position explained in foregoing para, Government finds that there is no merit in the contentions of applicant that they are eligible to claim rebate of duty paid @10% i.e. General Tariff Rate of Duty ignoring the effective rate of duty @ 4% or 5% in terms of exemption notification No. 4/06-CE dated 1.03.06 as amended. As such Government is of considered view that rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% or 5% in terms of Notification No. 4/06-CE dated 1.03.06 as amended, as applicable on the relevant date on the transaction value of exported goods determined under section 4 of Central Excise Act, 1944. 10. The applicant department has challenged the impugned Orders-in-Appeal and contended that manufacturers have already recovered excess duty from its buyer M/s Cipla Ltd., Mumbai and allowing re-credit of excess paid amount in the cenvat credit account of manufacturer will lead to additional benefit to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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