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2007 (2) TMI 77

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.... such inputs under the said AED (T&TA) Act was not utilized towards the final products in which these inputs were used, because no additional excise duty was payable on the final products. It is also admitted that in all these cases the final products which were exported were removed from the premises of the respondents under the rebate claim relatable to the provisions of Rule 18 of the Central Excise Rules. 3. Both the sides have advanced their contentions on the basis of the paper book of Central Excise Appeal No. 3618 of 2006. In that case, the respondent was registered for manufacture of "made ups", textiles home furnished articles and was availing Cenvat credit under Rule 3 of the Cenvat Credit Rules, 2002. Their refund claim was in respect of Cenvat credit of additional excise duty on the ground could not be utilized for home clearances and that they had consumed the raw material purchased for the manufacture of excisable goods exported on payment of duty under the rebate claim of duty. They, however, utilized the basic excise duty (BED) involved on the export under the rebate claim, but could not utilize the additional excise duty (AED) because their final product was not ....

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....bmitted that the respondents did not submit any details of inputs used in or in relation to the manufacture of the final products which were cleared for export. It was also submitted that in the show cause notice, it was alleged that such details of inputs used in relation to manufacture of final products which were cleared for export under bond or letter of undertaking were not furnished, which implied that the party was asked for details of the goods exported under bond. It was submitted that the Notification No. 11/2002-C.E., dated 1-3-2002, did not allow refund of Cenvat credit of inputs used in or in relation to the manufacture of final products cleared for export on payment of duty under a rebate claim. The respondents had filed their refund claims under Rule 5 of the Cenvat Credit Rules, 2002, and the conditions of Notification No. 11/2002 which was issued under the said Rule 5 were binding on the respondents. Since they were already granted rebate claims under Rule 18 of the Central Excise Rules, 2002, paid on exported goods manufactured out of the duty paid inputs, the refund claims on the duty paid inputs were not admissible under Rule 18. It was submitted that the Commis....

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....the Cenvat credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification. Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty". 7.2 The basic requirement for refund under Rule 5 is that the inputs should be used in the final products and such final products should be cleared for export or used in the intermediate products cleared for export as provided thereunder. The Cenvat credit in respect of such inputs which are used is allowed to be utilized by the manufacturer towards the payment of duty of excise on any final product cleared for home consumption or for export on payment of duty. In the present case, the ....

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.... may be specified. While Rule 18 applies to grant of rebates of duty by virtue of notification issued thereunder, Rule 19 relates to export without payment of duty subject to the safeguard conditions, as may be specified by notification issued by the Board. It is by virtue of the requirement in the notification issued under sub-rule (3) of Rule 19 that the question of bond or letter of undertaking could arise. Such Notification 42/2001-C.E., dated 26-6-2001, was issued by the Central Board of Excise and Customs under sub-rule (3) of Rule 19, which provided export under bond of the goods which were exported from the factory without payment of duty. The exporter was required to furnish a general bond in the form specified with out payment of excise duty. In the present case, admittedly, there were no exports without payment of excise and, therefore, Rule 19 had no applicability. Thus, no question had arisen of execution of bond as required by the said notification issued under Rule 19(3) by these respondents. They admittedly exported the goods by payment of excise duty which was done by adjusting the basic excise duty which was payable under the Central Excise Act, 1944, for which th....