TMI Blog2006 (5) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... Act'). 3. The respondent no.1 filed 45 rebate claims amounting to Rs.1,46,90,995/- (Rs. 75,42,487/- + Rs, 71,48,508/-) in the month of November/December 2004 in respect of export of polyester/cotton yarn cleared against ARE-2 on payment of Central Excise duty. The amount of rebate claimed includes Central Excise duty paid on the finished goods exported and also on raw materials used in the manufacture of exported goods. In other words, the rebate claim of the assessee comprised of the duty paid on the raw materials as well as duty paid on the finished products The assessee exported these goods on payment of Central Excise duty in the Cenvat Account for which the said rebate claims were filed under the provisions of Rule 18 of the Central Excise Rules, 2002 (for short, '2002 Rules'). 4. A show cause notice dated 11-1-2005 was issued to the respondent no.1 whereby the assessee was called upon to show cause to the Deputy Commissioner of Central Excise, Division-II Nagpur as to why the rebate claimed by the assessee should not be rejected as the same was contrary to the provisions of Rule 18 of the 2002 Rules read with Section 11-B of the Act and the notification issued there unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n - "Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft." It was contended that the revisional Authority is wholly wrong in relying upon Rule 12 of the old Rules of 1944 and old Notification Nos. 40/2001 and 41/2001 in order to hold that the respondent no.1 is entitled for rebate of duty paid on both the items. It was further contended that the revisional Authority completely ignored the provisions of Rule 18 of 2002 Rules as well as Notification Nos. 19/2004 and 21/2004 issued under Rule 18 of the 2002 Rules. 6. The learned Assistant Solicitor General for the petitioners contended that the word 'or' occurring in Rule 18 of the 2002 Rules is conjunctive. The dictionary meaning of the word as per Concise Oxford Dictionary is: "1. introducing the second of two alternatives (white or black), 2. introducing the only remaining possibility of choice given." This means that the usage of the word 'or' in Rule 18 indicates that an assessee has a choice to make between the two alter natives. The wordings of Rule 18, therefore, cannot be construed to mean that the assessee has an option of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on earlier rules and notifications, which are no longer relevant and, therefore, findings recorded by the revisional Authority in the impugned order cannot be sustained in law. 9. Shri Bhangde, learned Senior Counsel for the respondent no. 1, submitted that while considering provisions of Rule 18 of the 2002 Rules, the observations made in the impugned order by the revisional Authority are relevant, which read thus: "Government notes that as a principle and a policy measure, Government has accepted that export of goods from India should be relieved of domestic levies (both Customs and Central Excise) in order to promote export of domestic products from India and to make them internationally competitive." It was contended that the above statements made in the impugned order are not disputed by the petitioners and, therefore, the undisputed position is that object of the Rule in question is to relieve the export of goods from India from Central Excise duty with a view to promote export of domestic goods in order to make them globally competitive. 10. Learned Senior Counsel for the respondent no. 1 contended that the Central Government has issued Notification No. 19/2004 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted from duty at both stages and, therefore, analogy proposed by the petitioners so far as Rule 18 is concerned, in the context of the above referred facts, would result in discrimination. 13. Similarly, learned Senior Counsel Shri Bhangde contended that ex porter may follow Rule 19(1) and export goods without payment duty and procure the inputs on payment of duty and claim rebate under Rule 18, which the Department will permit and, therefore, will get benefit of non-payment of duty and/or rebate at both the stages. It was further contended that the exporter, under Rule 19(2) may procure the inputs free from payment of duty and make payment of duty on exported goods and pray for rebate of duty paid on exported goods under Rule 18, which is permissible even as per stand of the Department. Thus, the exporter will get benefit of non-payment of duty on inputs and rebate of duty on the final products. 14. It was further argued by learned Senior Counsel Shri Bhangde that the above referred examples would show that if the Department's stand is accepted, inequitable result would follow, which would result in discrimination. It is a settled law of interpretation that inequitable r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on board a ship proceeding to a foreign port or supplied to a foreign going aircraft." (d) The Central Government in exercise of power conferred by Rule 18 of the Central Excise Rules, 2002- and in supersession of the Ministry of Finance, Department of Revenue, Notification No. 40/2001-Central Excise (N.T.), dated 26th June 2001 (G.S.R. 469 (E) dated 26th June 2001) issued Notification No. 19/2004-Central Excise (N.T.), dated 6-9-2004, directing grant of rebate of whole of the duty paid on-all excisable goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) exported to any country other than Nepal and Bhutan subject to conditions and limitations as well as procedure specified in the said notification. Similarly, in exercise of power conferred by Rule 18 of the Central Excise Rules, 2002, the Central Government issued Notification No. 21/2004 Central Excise (N.T.), dated 6-9-2004 in supersession of Ministry of Finance, Department of Revenue, Notification No. 41/2001-Central Excise (N.T.) dated 26-6-2001 whereby the Central Government has directed that rebate of whole of the duty paid on the materials used in the manufacture or processing of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods when the Department has to refund the same in the form of rebate to the assessee. On the other hand, keeping in view the object to promote export of domestic products, the Legislature wanted to give some concession by way of rebate of duty paid on the excisable goods or on material used in manufacture or processing of such goods and not on both simultaneously. The language used in Rule 18 of the 2002 Rules is loud, clear, completely unambiguous and also capable of conveying the purpose for which Rule is evolved. After taking into consideration these vital aspects of the Rule, we are of the considered view that the rebate provided in Rule 18 of the 2002 Rules is only on duty paid on one of the items, i.e. either on excisable goods or on material used in manufacture or processing of such goods and, therefore, assessee is not entitled to claim rebate on both the items simultaneously. 19. In order to consider the purport of Rule 18 of the 2002 Rules, Notification Nos. 19/2004 and 21/2004, dated 6-9-2004 issued by the Central Government are relevant. These two notifications are issued in exercise of power conferred by Rule 18 of the 2002 Rules for grant of rebate of duty on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned." Perusal of the above referred observations made by the Apex Court makes it evident that while considering the issue as to whether word "or" used in the statute can be read as "and", the language, object and purpose for which such statute is evolved are required to be considered and it is only on such consideration, appropriate interpretation consistent with the object of such statute is required to be given, which should further the cause and the interpretation which defeats the very object of the statute should be avoided since such interpretation would de feat the very intention of the Legislature. The observations of the Apex Court, in our view, are of no help to the respondent no. 1. 21. Another contention canvassed by Shri Bhangde, learned Senior Counsel for the respondent no. 1 that Rules 18 and 19 of the 2002 Rules are required to be read as complementary to each other so as to provide equitable result is also misconceived. The area of operation and the situation in which these Rules operate are totally different and distinct and, therefore, cannot be equated with each other. So far as Rule 18 is concerned, it deals with entitlement of assessee for grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on for considering the entitlement for grant of rebate claimed by the respondent no. 1. We have no hesitation to hold that after 2002 Rules came into force, the entitlement of respondent no.1 for grant of rebate on duty paid can only be considered as per the procedure prescribed under Rule 18 of the 2002 Rules as well as Notification Nos. 19/2004 and 21/2004, dated 6-9-2004 issued by the Central Government under Rule 18 of the 2002 Rules. 23. The entire approach and the procedure adopted by the revisional Authority, in our view, is wholly misconceived and completely inconsistent with the provisions of Rule 18 of the 2002 Rules. Similarly, reliance placed by the revisional Authority on the notifications and Rules, which are superseded and have lost force of law, for deciding entitlement of respondent no. 1 for grant of rebate, in our view, is impermissible in law and, therefore, findings recorded by the re visional Authority are wholly misconceived and completely devoid of substance. 24. Similarly, reliance placed by the revisional Authority on Rule 19 in order to consider the purport of Rule 18 of the 2002 Rules is also misconceived. We have already observed that Rule 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y will have to be considered on the basis of Rules and notifications, which are in force at the time of making claim by the assessee. In the instant case, when the claims were made by the respondent no. 1, the Central Excise Rules, 2002 were in force and notifications of 2004 issued under Rule 18 were holding the field and, therefore, entitlement for grant of rebate claimed by the assessee can only be considered on the basis of new Rules. In the instant case, the findings recorded by the appellate Authority, i.e. Commissioner of Central Excise (Appeals) in the appellate order dated 15-3-2005, in our view, are just and proper and sustainable in law and, therefore, same are hereby confirmed. 27. For the reasons stated herein above, the impugned order dated 22-8-2005 passed by the revisional Authority is quashed and set aside. The matter is remanded back to the competent Authority to decide the claim of the respondent no. 1 for rebate of duty paid either on the exported goods or rebate of duty paid on materials used in the manufacture or processing of such goods, after granting personal hearing to the respondent no. 1. 28. The rule is made absolute in the above terms. No order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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