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2016 (4) TMI 192 - GOVERNMENT OF INDIA

2016 (4) TMI 192 - GOVERNMENT OF INDIA - 2015 (326) E.L.T. 399 (G. O. I.) - Rebate claims of duty paid on exported of exempted goods under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - Held that:- Government finds that there is no merit in the contentions of applicants that they are eligible to claim rebate of duty paid @ 10%, i.e., General Tariff Rate of Duty ignoring the effective rate of duty @ 0%/4% or 5%. As such, Government is of .....

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where excise duty payable was NIL in terms of Notification No. 4/2006, dated 1-3-2006 read with Notification No. 21/2002-Cus., dated 1-3-2002 or confirmed recovery of rebate erroneously sanctioned on the ground that duty was not payable by the applicant. As held in above paras, the rebate is admissible only to the extent of 0%/4%/5% as the case may be.

The Notification No. 4/2006, dated 1-3-2006 issued under Section 5A(1A) of the Act, grants exemption from whole of duty of excise abs .....

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duty on the exempted goods as per proviso 5A(1A) of Central Excise Act, 1944 and no Cenvat credit on the inputs is available under Rule 6(1) of Cenvat Credit Rules, 2004. Further the applicant has also not claimed that the duty on such fully exempted goods has not been paid from such inadmissible Cenvat credit and therefore, no re-credit is permissible in such cases. Hence, Government finds that orders of recovery by original/appellate authority are legal and proper. - F. Nos. 195/795-798/2012- .....

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795-798/12 M/s. Intas Pharma Ltd. v. CCE, Ahbd-II 169-172/2012 (Ahd-II) CE/ Ak/Commr.(A), dated 28-6-2012 1514/Rebate/2012, dated 10-4-2012 & others 2. 195/235/13 -DO- 297/12(AHD-II) CE/Ak/COMMR (A)/AHD, dated 31-12-2012 2759/Rebate/2012, dated 27-6-2012 3. 195/236-240/13 -DO- 250-254/12(AHD-II)CE/Ak/ COMMR(A)/ AHD, dated 18-10-2012 MP/191-192/ 2012/Rebate, dated 20-3-2012 4. 195/243/13 -DO- 255/12(AHD-II) CE/Ak/COMMR (A)/AHD, dated 22-10-2012 32-37/ ADC/Demand/ 2012/AS, dated 15-3-2012 5. 1 .....

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2/DC (rebate), Raigad, dated 30-4-2012 9. 195/241/13 -DO- BC/432/RGD (R)/12-13, dated 29-11-2012 1363/12-13/DC(Rebate)/ Raigad dated 22-8-2012 10. 195/242/13 -DO- BC/430/RGD (R)/12-13, dated 29-11-2012 1232/12-13/DC (Rebate)/Raigad, dated 2-8-2012 11. 195/430-434/13 -DO- US/871-875/ RGD/12, dated 11-12-2012 323/12-13/DC (Rebate)/Raigad, dated 30-4-2012 & others 2. Brief facts of these cases in common are that the applicant, a manufacturer-exporter, filed rebate claims of duty paid on ex .....

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006-C.E., dated 1-3-2006 read with Notification No. 21/2002-Cus., dated 1-3-2002. The original authority, after following due process of law, held that duty was required to be paid on exported goods at the effective rate of duty in terms of the said notifications as amended and rejected the rebate for goods cleared under total exemption and sanctioned the rebate claims to the extent of duty payable @ 0%/4%/5% on FOB value of the goods. In some cases, the demand was confirmed for recovery of the .....

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rate of 10% when the goods were actually chargeable to Nil rate of duty under Notification No. 4/2006-C.E., dated 1-3-2006 read with Notification No. 21/2002-Cus., dated 1-3-2002. 3. Being aggrieved by the said Orders-in-Original, applicants filed appeals before Commissioner of Central Excise (Appeals), who upheld the impugned Orders-in-Original allowed re-credit of excess duty paid in Cenvat credit account and rejected the appeals of the applicant. 4. Being aggrieved by the impugned O .....

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se Duty rate of 4.12% (5.15% as amended), the said Tariff Notification, has been issued by the Central Government, under Section 5A(1) of the Central Excise Act and has been approved by the Indian Parliament. The applicants, now prefer to refer to Serial Entry No. 21 of the Table, to the Notification No. 2/2008-C.E., dated 1-3-2008, whereunder, the same Medicaments of Heading 3004 of the First Schedule to the said Tariff Act, are assessable to the Cenvat, at the rate of 10% ad valorem and accord .....

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First Schedule to the said Tariff Act, the Indian Parliament has floated two different Notifications, namely, (1) Notification No. 4/2006-C.E., dated 1-3-2006, with Serial Entry No. 62-C, whereunder, Medicaments of Heading 3004 of the First Schedule to the said Tariff Act, are chargeable to total Central Excise Duty of 4.12% (5.15% as amended) ad valorem and (2) Notification No. 2/2008-C.E., dated 1-3-2008, with Serial Entry No. 21, whereunder, same Medicaments of the same Heading 3004 of the F .....

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e two notifications, namely, (1) Notification No. 4/2006-C.E., dated 1-3-2006 and (2) 2/2008-C.E, dated 1-3-2008, the applicants, have selected Notification No. 2/2008-C.E., dated 12-3-2008 and paid Central Excise Duty accordingly, on the export goods and their selection cannot be denied by the Excise Authorities. In the premises, the Original Authority, has without appreciating the legality of the matter, wrongly issued directions, for re-credit of Central Excise Duty, at the rate of 6.18% cred .....

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d that the expression Refund under Section 11B of the Central Excise Act also means rebate of duty paid on export goods. In terms of the Para 7.2 of the said Chapter 9 of the Supplementary Instructions, a refund or rebate is always to be given only by a cheque and the Adjudicating Authority does not have any jurisdiction to allow rebate by way of Cenvat credit in the Cenvat credit account of the applicants. In these premises, the Order-in-Original of the Original Authority, granting rebate under .....

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ceutical products at low rate of 4% is to keep the price of Pharmaceuticals as low as possible and therefore, it cannot be the intention of the Government to export goods at higher price it being the priority area. Government will always want to keep cost of exportable goods low and therefore, it does not fit in to the logic that it was ever intention of the Government to allow export of goods at the Central Excise duty rate of 10%, notwithstanding the rebate but this argument is unreasonable by .....

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he cost of export goods increased on the contrary. 4.6 Case laws relied upon by the applicants are : Mangalam Alloys Ltd. v. C.C.E., Ahmedabad - 2010 (255) E.L.T. 124 (Tri.-Ahmd.) CCE, Baroda v. India Petro Chemicals Corporation Ltd. - 1997 (92) E.L.T. 13 (S.C.) HCL Ltd. v. CCE, New Delhi - 2001 (130) E.L.T. 405 (S.C.) Share Medical Care v. UOI - 2007 (209) E.L.T. 321 (S.C.) CCE, Bangalore v. Maini Precision Products Pvt. Ltd. - 2010-TIOL-1663-(Tri.-Bang.) = 2010 (252) E.L.T. 409 (T) HYVA ( .....

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xempting excisable goods absolutely from whole of the duty leviable and they are at liberty to choose either of the beneficial notifications. 5. Personal hearing was scheduled in this case on 13-3-2015. Shri Hiren Soni, Asstt. Manager (W.H.) and Shri Hemang Vaishnav, Asstt. Manager (IT) appeared for personal hearing on behalf of applicant. The applicant submitted written submission dated 13-3-2015, wherein, they mainly reiterated contents of impugned revision applications. None attended per .....

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008 as amended. Similarly, the manufacturers had cleared said goods for home consumption on payment effective rate of duty @ 4% up to 28-2-2011 and @ 5% w.e.f. 1-3-2011 under Notification No. 4/2006-C.E., dated 1-3-2006 as amended or in some cases at 0% in terms of Notification No. 21/2002-Cus., dated 1-3-2002 read with Notification No. 4/2006-C.E., dated 1-3-2006. The original authority after following due process of law, held that duty was required to be paid on exported goods at the effective .....

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vail any notification whichever they find beneficial to them. Therefore, they have claimed to be eligible for rebate of duty paid on export goods @ 10% in terms of Notification No. 2/2008-C.E., dated 1-3-2008 as amended. 8.1 It is observed that Central Government issued Notification No. 2/2008-C.E., dated 1-3-2008 which had an effect of reduction in general rate of Central Excise duty on various products from 16% to 14%. Subsequent amendment by Notification No. 58/2008-C.E., dated 7-12-2008 .....

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No. 2/2008-C.E., dated 1-3-2008 as amended, attracted general tariff rate of duty @ 10%. At the same time the Notification No. 4/2006-C.E., dated 1-3-2006 providing for effective Nil rate of duty was amended vide Notification No. 4/2008-C.E., dated 1-3-2008 by inserting Sr. Nos. 62A, 62B, 62C, 62D & 62E for CETH 3001, 3003, 3004, 3005 & 3006 (except 3006.60 & 3006.92) prescribing effective rate of duty @ 8%. Thereafter, said Notification No. 4/2006-C.E. was amended vide Notification .....

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int Secretary (TRU) vide D.O. Letter No. 334/1/2008-TRU, dated 29-2-2008 clarified that the excise duty on drugs and pharmaceutical products falling under Central Excise Tariff Headings (CETH) Nos. 3001, 3003, 3004, 3005 & 3006 (except 3006.60 and 3006.92) has been reduced from 16% to 8% and thus general effective rate for all goods of Chapter 30 is now 8%. He explained the changes made in excise and customs duties through Finance Bill, 2008 introduced in Lok Sabha on 29-2-2008 vide paras 1, .....

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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 c .....

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ification 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. However, in the present case the issue involved is not so much regarding the applicability of two notifications for payment of duty but whether rebate of duty paid at tariff rate or effective rate are to be allowed. 8.3 It is felt that it is necessary to visit the background behind the issue of these two notifications. Notif .....

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dated 1-3-2011 and the effective rate of duty was enhanced to 5%. On the other hand, the tariff rate of duty for the Chapter Heading 3004 was 16% adv. However subsequently reduction in general tariff rate of duty was effected. The Hon ble Finance Minister in his speech while presenting the Union Budget for 2008-09 in the Parliament stated that :- PART-B VIII. PROPOSALS TAX Para 144. The manufacturing sector is the backbone of any economy. It is consumption that drives production and it .....

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9-10 in the Parliament stated that : PART B PROPOSALS TAX 116. Hon ble Members are aware that the Government announced a series of fiscal stimulus packages, one of the key elements of which was the sharp reduction in the ad valorem rates of Central Excise Duty for non-petroleum products by 4 percentage points across the board on 7th of December, 2008 and by another 2 percentage points in the mean Cenvat rate on the 24th February, 2009. 117. ……… 118 …&he .....

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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, .....

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nt to 10 per cent ad valorem. From the above, it is quite clear that Notification No. 2/2008-C.E., dated 1-3-2008 (14%) and subsequent amending Notification No. 58/2008-C.E., dated 7-12-2008 (10%), 4/2009-C.E., dated 24-2-2009 (8%) and 6/2010-C.E., dated 27-2-2010 (10%), were issued to reduce/alter the general tariff rate of duty. 8.4  Government observes that the instructions issued by C.B.E. & C. regarding assessment of export goods are also relevant to decide the issue involved in th .....

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oods for home consumption. The classification and rate of duty should be in terms of Central Excise Tariff Act, 1985 read with any exemption notification and/or Central Excise Rules, 2002. The value shall be the transaction value and should conform to Section 4 or Section 4A, as the case may be, of the Central Excise Act, 1944. It is clarified that this value may be less than, equal to or more than the FOB value indicated by the exporter on the Shipping Bill. A plain reading of said para reveals .....

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s 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%, 8% to 4% and finally to 5% by different am .....

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of Part-I of Chapter 8 of C.B.E. & C. 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 ongoing economic recession. Normally changes in General Tariff rate are carried out through Finance Bill/Act. Government, therefore, is of the view that duty was payable @ 0%/4%/5% on the export goods and rebate cannot be granted on the duty p .....

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nt has to assess all goods whether cleared for export or home consumption in the same manner. They cannot assess export goods as higher rate of duty @ 10% and goods cleared for home consumption at lower rate of duty @ 0%/4%/ or 5%. Any one notification has to be chosen and clearance of goods have to be in the same manner even if there are two effective rates of duty as per two notifications. In this case, the situation is different. In this case, there are two notifications, one prescribes Gener .....

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all clearances even if it is considered as case of applicability of two notifications. 8.6 Government notes that departmental authorities are bound by C.B.E. & C. Circulars/Instructions and they have to comply with the same. Hon ble Supreme Court has held in the case of Paper Products Ltd. v. CCE - 1999 (112) E.L.T. 765 (S.C.) that circulars issued by C.B.E. & C. are binding on departmental authorities, they cannot take a contrary stand and department cannot repudiate a circular iss .....

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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 : i. CCE, Baroda v. Indian Petro Chemicals - 1997 (92) E.L.T. 13 (S.C.) ii. HCL Ltd. v. CC, New Delhi - 2001 (130) E.L.T. 405 (S.C.) iii. M/s. Arvind Ltd. v. UOI - 2014 (300) E.L.T. 481 (Guj.). 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 benefi .....

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earing, has further relied upon the case of M/s. Arvind Ltd. v. UOI, which was decided by Hon ble Gujarat High Court. The applicant, in this case, paid 4% duty in terms of Notification No. 59/2008-C.E., while absolute exemption was available under Notification No. 29/2004-C.E. (N.T.), as amended by Notification No. 58/2008-C.E. The Revenue contended that once the goods were exempted from payment of duty in terms of Notification No. 58/2008-C.E. (N.T.), they were not required to export the goods .....

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ve rate of duty @ 4% or 5% in terms of Notification No. 4/2006-C.E., as amended and other is Notification No. 2/2008-C.E. (which is not in fact exemption notification), which provides general tariff rate at 10%. Hence, facts of these cases are different and not applicable to present case. 8.9 Government further observes that the above said judgments are not in the context of sanctioning of rebate claims in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E .....

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cision, not proper. The following words of Lord Denning in the matter of applying precedents have become locus classicus : Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect in deciding such cases. One should avoid temptation to decide cases by matching the colour of one case against the colour of another ……………. . Therefore, it needs to be reit .....

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ication and the excess paid amount as duty from the Cenvat credit is to be refunded in the Cenvat credit account. 8.10.1 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 spec .....

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ty. 8.10.2 Government also notes that identical issue in case of the same applicant has been decided vide Revision Order Nos. 278-309/14-CX., dated 29-8-2014 and ratio of the said revision order is squarely applicable to this case. 9. In view of position explained in foregoing paras, Government finds that there is no merit in the contentions of applicants that they are eligible to claim rebate of duty paid @ 10%, i.e., General Tariff Rate of Duty ignoring the effective rate of duty @ 0 .....

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the amount paid in excess of duty payable (@ 4% or 5% in terms Notification No. 4/2006, dated 1-3-2006 as amended) on one s own volition cannot be retained by Government and it has to be returned to applicant in the manner in which it was paid. Accordingly, such excess paid amount/duty which is required to be returned to the applicants, has already been allowed by the original/appellate authority. Hon ble High Court of Punjab & Haryana at Chandigarh vide order dated 11-9-2008 in CWP Nos. 223 .....

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or remaining portion, refund by way of credit is appropriate. Therefore, the lower authorities have rightly allowed the re-credit of the excess paid amount of duty in then Cenvat credit account. 11. Government also notes that in some cases the original authority either denied rebate where excise duty payable was NIL in terms of Notification No. 4/2006, dated 1-3-2006 read with Notification No. 21/2002-Cus., dated 1-3-2002 or confirmed recovery of rebate erroneously sanctioned on the ground .....

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