TMI Blog2013 (11) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... circulars, consistency and discipline are of far greater importance than winning or losing Court proceedings. - In view of this position, Government upholds the applicability of above said C.B.E. & C. Instructions in this case. Applicants are not eligible to claim of rebate of duty paid @ 10% i.e. General Tariff Rate of Duty ignoring the effective rate of duty @ 4% in terms of exemption Notification No. 4/2006-C.E., dated 1-3-2006 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% in terms of Notification No. 4/2006-C.E., dated 1-3-2006 as amended, on the transaction value of exported goods determined under Section 4 of Central Excise Act, 1944. The amount of duty paid in excess of duty payable at effective rate of 4% is to be treated as voluntary deposit made by manufacturer with the Government. The excess paid amount may be allowed to be re-credited in the Cenvat credit account of the manufacturer subject to compliance of the provisions of Section 12B of Central Excise Act, 1944. - Decision in the case of M/s. Nahar Industrial Enterprises Ltd. v. UOI [2008 (9) TMI 176 - PUNJAB AN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INCIPLES OF NATURAL JUSTICE. Issuing of a show cause notice is a pre-requisite for initiation any legal proceeding. In this regard the applicant relied on Hon ble Supreme Court judgment given in the case of Ramana Dasaram Sheety v. The International Airport Authority of India and Others reported in AIR 1974 SC page 1628. 4.2 The applicant further argued before the Commissioner (Appeals) that the applicant had removed their final product in domestic tariff area for home consumption on payment of 4% duty by taking benefit of exemption Notification No. 4/2006, dated 1-3-2006, whereas at the same time they have paid duty at the rate of 10.30% by claiming benefit of exemption Notification No. 2/2008-C.E., dated 1-3-2008 on the goods exported under the claim of rebate of duty paid through Cenvat account which is not permissible as per Central Excise Law. The Assistant Commissioner further held that if the applicant felt that the exemption under Notification No. 2/2008, dated 1-3-2008 is more beneficial to them they should have followed the same even for the payment of Central Excise Duty on DTA clearance. This finding of the Assistant Commissioner is totally wrong. This is because, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther relied on Modi Xeros case reported in 1997 (94) E.L.T. 139 and Parashuram Cements case reported in 2009 (238) E.L.T. 196 (Tri.-Del.). The fact of the above mentioned judgments are totally different and, therefore, cannot be relied in the applicant s case. It was further argued before the Commissioner (Appeals) that the same Assistant Commissioner Mr. Vishwanath in M/s. Plethico Pharamacuticals case, a company manufacturing the same products as that of the applicant, has allowed the rebate claim of the said company, when they had exported the goods by paying 10% of duty under Notification No. 2/2008, dated 1-3-2008. 4.5 As per Rule 18 of the Rules itself rebate of duty paid on excisable goods exported may be granted by the Central Govt. Now what is the meaning of, duty paid on excisable goods . As per Rule 4(1) of the Rules says, every person who produces or manufactures any excisable goods shall pay the duty leviable on such goods in the manner provided in Rule 8 or under any other law . This rule provides that every person engaged in the manufacture of excisable goods, can remove the goods from his factory only after payment of duty leviable on such goods. As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full effect to the existing exemption notifications. Thus in the present case duty payable is the duty payable after giving effect to the Notification No. 4/2006-C.E., dated 1-3-2006 as amended, which is the proper Notification for prescribing effective rate of duty to the products of the applicant and the applicant are also paying duty under this Notification for domestic clearances. 5. Personal hearing was scheduled in this case on 7-11-12, 20-2-13 and 15-10-13. Nobody appeared for hearing. Hence, Government proceeds to decide the case on the basis of available records. 6. Government has carefully gone through the relevant case records, and perused the impugned orders-in-original and orders-in-appeal. 7. Government observes that original authority restricted rebate claim to the extent of duty payable @ 4% and allowed re-credit of balance amount in their Cenvat credit account on the ground that duty was required to be paid on export clearance also @ 4% under Notification No. 4/2006-C.E., dated 1-3-2006 and not at the higher rate of duty @ 10% under Notification No. 2/2008-C.E., dated 1-3-2008. Commissioner (Appeals) upheld impugned order-in-original. Now, the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some cases, a deeper reduction has been made, the details of which are indicated in the subsequent paragraphs. These changes have been carried out by notification. The other ad valorem rates of 24%, 12% and 8% have been retained. 2.2 Since the reduction in the general rate has 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 (except 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 117. . 118. . 119. . 120. With --- ---further convergence of central excise duty rates to a mean rate - 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 filters/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 sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable effective rate of duty will be as per the exemption notification. The said instruction is issued specifically with respect to sanctioning of rebate claim of duty paid on exported goods and therefore the whole issue will have to be examined in the light of these instructions. As explained above, Notification No. 2/2008-C.E., dated 1-3-2008 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. 4/2006-C.E., dated 1-3-2006 as amended prescribed effective rate of duty from initial rate of 0% to 8% and finally to 4% 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. 2/2008-C.E. as amended provided for General tariff rate of duty and Notification No. 4/2006-C.E. 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 C.B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further held that department s actions have to be consistent with the circulars, consistency and discipline are of far greater importance than winning or losing Court proceedings. Government finds that as per Rule 18 of Central Excise Rules, 2002 rebate of duty paid on excisable goods exported is to be granted subject to compliance of procedure/conditions prescribed in the Notification. Here the duty paid would mean duty paid under the provisions of Central Excise law. Since the duty was to be paid as per effective rate, excess duty paid cannot be rebated under Rule 18. In view of above position, Government upholds the applicability of above said C.B.E. C. Instructions in this case. 8.6 Applicant has relied upon number of case laws to the proposition that it was up to the assessee to choose a notification which is most beneficial to him. Government notes that in the cases cited namely CCE, Baroda v. Indian Petro Chemicals, Hon ble Supreme Court has held that when two notifications co-exist 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 optio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof in between a given financial year thereby leading to arise of different question of law. 8.7 Government further notes that following case laws lend support to the view that rebate is to be allowed of the duty paid on exported goods at effective rate prescribed in the notification and the excess paid amount as duty from the Cenvat credit is to be refunded in the Cenvat credit account. 8.7.1 Hon ble Supreme Court has held in the case of CCE v. Parle Exports, 1988 (38) E.L.T. 741 (S.C.) that when a notification is issued in accordance with power conferred 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 judgment in the case of Mahindra Chemicals v. CCE, Ahmedabad, 2007 (208) E.L.T. 505 (Tri.-Ahmd.) while relying on above said Apex Court judgment 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 notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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