TMI Blog2012 (12) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... r such circumstances, Government finds that rejection of applicant’s rebate claim for the reasons stated above is not tenable. The applicant is claiming to have maintained proper Cenvat credit accounts for their clearances of exports after payment of duty which stands duly submitted to the jurisdictional Central Excise office. Applicant has claimed that they were availing actual Cenvat credit on the inputs which are to be used only for the goods to be cleared on payment of duty. This pleading has not been considered by lower authorities especially the certifications from the jurisdictional Superintendent of Central Excise, dated 13-5-2010. Applicant exporter herein is eligible for rebate in the manner it was granted by the original rebate sanctioning authority subject to verification that applicant had complied with the procedure laid down in C.B.E. & C. Circular No. 795/28/2004-CX., dated 28-7-2004. - Government sets aside both the impugned Orders-in-Appeal and restores the impugned Order-in-Original No. 513/10-11, dated 5-7-2010 subject to condition that applicant had complied with the procedure laid down in C.B.E. & C. Circular No. 795/28/2004-CX., dated 28-7-2004. - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods exported are wholly exempted from payment of Excise duty and payment made cannot be considered to be the payment of Central Excise duty and consequently rebate of such amount paid cannot be sanctioned in terms of Rule 18 of the Central Excise Rules, 2002 and hence not eligible for Rebate claim. Therefore the impugned Order-in-Original was reviewed by the jurisdictional Commissioner under Section 35E(2) of the Central Excise Act, 1944 and an appeal was preferred before Commissioner (Appeals). The applicants thereafter filed cross-objection dated 10-12-2010 and contended that they are not concerned with the exemption Notification No. 30/2004-C.E., dated 9-7-2004 and they have exported PTY on payment of duty under Notification No. 29/2004-C.E., dated 9-7-2004. The applicants contended that they availed the credit on inputs used for manufacture of PTY exported and the question of application of Notification No. 30/2004-C.E., dated 9-7-2004 does not apply when credit on input is taken. But these submissions were found inadequate and this Order-in-Original was set aside by the Commissioner (Appeals) vide Order No. US/334/RGD/2011, dated 4-10-2011. 2.2 The brief facts of 2nd c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Notification No. 29/2004-C.E. As per sub-section (1A) of Section 5A the assessee has to compulsorily opt for absolute exemption Notification and accordingly, the clarification issued by C.B.E. C. is correct and legal. In the instant case, the said clarification has no applicability being there is no involvement of any absolute exemption Notification. The Notification No. 30/2004-C.E., dated 9-7-2004 is subject to condition that no input credit is availed. Wherever input credit is availed by assessee the assessee has to compulsorily pay duty under Notification No. 29/2004-C.E., dated 9-7-2004 it is therefore submitted that the applicants correctly availed the credit on inputs and correctly paid the duty under Notification No. 29/2004-C.E., dated 9-7-2004 and the impugned order passed by the Commissioner (Appeals) by illegally relying upon above referred C.B.E. C. circular is not correct and requires to be set aside forthwith. 4.1.2 It is submitted that as per the impugned order passed by the Commissioner (Appeals), the applicants ought to have compulsorily effected the export consignment as exempted under Notification No. 30/2004-C.E., dated 9-7-2004 and option for bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n application F. No. 195/698/12-RA pertaining to Order-in-Appeal at (ii) above :- 4.2.1 That the Commissioner (Appeals), Mumbai-II while passing the earlier Order-in-Appeal No. US/334/RGD/2011, dated 4-10-2011 i.e. while allowing the appeal of the department mainly relied upon provisions of Section 5A(1A) of Central Excise Act, 1944 and C.B.E. C. Circular No. 937/27/2010-CX, dated 26-11-2010 to hold that the Notification No. 30/2004-C.E., dated 9-7-2004 was absolute exemption notification issued under Section 5A and therefore no duty was required to be paid under Notification No. 29/2004-C.E., dated 9-7-2004 on export clearances. The applicants submit that they demonstrated before the Commissioner (Appeals), Mumbai-II that the reliance placed on Section 5A(1A) and C.B.E. C. Circular No. 937/27/2010-CX., dated 26-11-2010 was totally erroneous as the Notification No. 30/2004-C.E., dated 9-7-2004 is not absolute exemption notification and the assessee has to compulsorily pay the duty under Notification No. 29/2004-C.E., dated 9-7-2004 when the credit on input is availed which is not disputed in applicants case. It is submitted that the Commissioner (Appeals), Mumbai-II in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid the duty under Notification No. 29/2004-C.E., dated 9-7-2004 and the impugned order passed by the Commissioner (Appeals), Mumbai-II is illegal and not tenable. Relied upon case laws are :- (i) Inter-Globe Services - 2011 (272) E.L.T. 476 (G.O.I.) (ii) Auro Spinning Mills Ltd. - 2012 (276) E.L.T. 134 (G.O.I.) (iii) Cheviot Company Ltd. v. CCE, Kolkata-VII - 2010 (255) E.L.T. 139 (Tri.-Kolkata) (iv) Sri Lakshmi Saraswathi Textiles (Arni) Ltd. v. CCE, Pondicherry - 2008 (222) E.L.T. 390 (Tri.-Chennai). 4.2.4 It is submitted that as per the impugned order passed by the Commissioner (Appeals), the applicants ought to have compulsorily effected the export consignment as exempted under Notification No. 30/2004-C.E., dated 9-7-2004 and option for benefit of Notification No. 29/2004-C.E., dated 9-7-2004 with benefit of Cenvat Credit Rules, 2004 was not at all available to the applicants. This is contrary to the dual system introduced by the Government with effect from 9-7-2004 and also contrary to the C.B.E. C. Circular No. 795/28-CX., dated 28-7-2004 whereunder the C.B.E. C. clarified that Textile unit can opt for Notification No. 29/2004-C.E., dated 9-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed this revision application on grounds mentioned in para 4 above. 8. Government notes that the Commissioner (Appeals) has taken view that when any goods or class of goods are fully exempt from payment of duty under one Notification and are chargeable to a given rate of duty under another Notification then in view of sub-section (1A) of Section 5A of the Central Excise Act, 1944 the manufacturer does not have any option but to avail the exemption. It is further noted that Commissioner (Appeals) neither discussed nor opined upon the applicant s submission of following C.B.E. C. s Circular No. 795/28/2004-CX., dated 28-7-2004. The applicant herein is also submitting that provisions of sub-section (1A) of Section 5A of the Central Excise Act, 1944 are not applicable here because the provided exemption is not absolute but depends upon availment or not of the Cenvat credit involved. 8.1 In a situation as above and for the sake of clarity of issue, Government finds it proper that in addition to provisions mentioned herein above it is further required to peruse the other relevant provision of law along with the applicable circulars, which are extracted below : Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h credit availment with the relevant records maintained by them showing input quantity used for the goods manufactured and cleared on payment of duty. In case any subsequent verification reveals that such proportionate credit taken is incorrect, the penal provisions as prescribed under the law will be taken against such assessees. 9. It is noted that the Commissioner (Appeals) herein has heavily relied upon C.B.E. C. Circular No. 937/27/2010-CX., dated 26-11-2010 and impugned Order-in-Appeal has been passed on the Notification No. 30/2004-C.E., dated 9-7-2004. However, the facts involved in the present case are different. The C.B.E. C. Circular, dated 26-11-2011 dealt with the issue of exemption available under Notification No. 29/2004-C.E., dated 9-7-2004 as amended by Notification No. 59/2008-C.E., dated 7-12-2008. On the other hand, Notification No. 29/2004-C.E., dated 9-7-2004 prescribed concessional rates of 8% and 4% on Textiles and Textile Articles. Vide Notification No. 58/2008 the rates were reduced across the board by 4%. The rate of 8% was reduced to 4% and the rate of 4% was reduced to NIL. Notification No. 59/2008-C.E., dated 7-12-2008 also provided concessional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions of maintenance of separate account has been dispensed with and instead the manufacture was advised to take proportionate input credit at the end of month on inputs used in the manufacture of finished goods cleared by them on payment of duty. As such, the applicant though was having an alternative but has stated to have duly maintained the separate account for goods availing of Notification No. 29/2004-C.E. and goods availing of Notification No. 30/2004-C.E. Under such circumstances, Government finds that rejection of applicant s rebate claim for the reasons stated above is not tenable. The applicant is claiming to have maintained proper Cenvat credit accounts for their clearances of exports after payment of duty which stands duly submitted to the jurisdictional Central Excise office. Applicant has claimed that they were availing actual Cenvat credit on the inputs which are to be used only for the goods to be cleared on payment of duty. This pleading has not been considered by lower authorities especially the certifications from the jurisdictional Superintendent of Central Excise, dated 13-5-2010. 10. In view of above submitted factual details and totality of all other s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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