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2016 (7) TMI 228 - GOVERNMENT OF INDIA

2016 (7) TMI 228 - GOVERNMENT OF INDIA - TMI - Recovery of Rebate/ refund granted earlier - input stage rebate under Rule 18 had been granted to the respondent based on input output declaration which was subsequently found to be incorrect - respondent had mis-declared that the waste obtained would not be reprocessed/recycled further to obtain menthol which led to wrong fixation of the input output norm 1.250 kg DMO 1.000 kg menthol by the Division Office which effect was required to be fixed as .....

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input output norm which were subsequently correctly re-fixed as 1:1 to which the respondent had agreed vide letter dated 17.02.2011. Thereafter, the rebate sanctioned on the basis of the earlier fixation of norms has been appealed against. Thus the order of appellate authority is not proper as it did not take into consideration the mis-representation of facts by the respondent to avail excess monetary benefit and subsequent re-fixing of input output norms. - Commissioner (Appeals) has passed .....

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had voluntarily agreed to re-fixing of norms. - Matter remanded back to Commissioner (Appeals) for fresh consideration - Decided in favor of revenue. - F.No.198/179-186/12-RA - ORDER NO. 02-09/2016-CX - Dated:- 11-1-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: This revision application is filed by the Commissioner of Central Excise, Chandigarh-ll (hereinafter referred to as Department applicant) against the Order in-Appeal No. 86-93/CE/Appl/CHD-11/2011 dated 29.02.2012 passed by the Co .....

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t, 1985 manufactured (using duty paid inputs/packing material) and cleared consignment of menthol (CETH 29061100 and exported vide Notification No. 4/2006 dated 01.03.2006 as amended vide Notification No. 4/2008 dated 01.03.2008) for export and after exportation of goods filed rebate claims of duty paid on inputs under Rule 18 of Central Excise Rules, 2002 as per provisions of Notification No, 21/2004-CE(NT) dated 06.09.2004 read with Part V of Chapter 8 of CBEC Supplementary Instructions Manual .....

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hol and would be cleared as de-mentholized oil terpenelss. 2.3. The respondent filed rebate claims therefore of duty paid on excisable materials used in the manufacture of export goods, before the Deputy Commissioner, Central Excise Division, Derabassi who sanctioned the rebate claims vide impugned Orders-In-Original R-1804-1811/DB/2010 dated 16.112010. 2.4. To verify whether recoverable waste is being processed to obtain Menthol or not by the respondent, a team of preventive officers, Central E .....

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lared that the waste obtained would not be reprocessed/recycled further to obtain menthol which led to wrong fixation of the input output norm 1.250 kg DMO 1.000 kg menthol by the Division Office which effect was required to be fixed as 1:1 as the respondent was recycling/reprocessing the mother liquor and other wastes to obtain further menthol. Subsequently, the respondent had themselves voluntarily agreed to vide their letter dated 17.02.2011 that rebate be sanctioned as per the norms 1 kg de- .....

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reprocessed/recycled further to obtain menthol which led to wrong fixation of the input output norm ration of 1.25 :1 instead of 1.00:1 by the Division office and had fraudulently taken more rebate in cash to the extent of 20%. Commissioner (Appeals) vide his common Order-in-Appeal No. 86-93/CE/Appl/CHD-II/2011 dated 29.02.2012 upheld the impugned Order-in-Original ibid and rejected the appeals filed by the revenue. 4.Being aggrieved by the impugned Orders-In-Appeal, the department has filed thi .....

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menthol, and 1.000 kg of DMO to 1 kg of menthol crystals vide C No. V(Misc)Rebate/Notifi 21/04/DB/2/2009/1121 dated 04.03.2011. 4.2. That Commissioner (Appeals) in his order has not considered the fact and circumstances which led to re-fixation of input output norms subsequently as 1:1 and grossly erred in simply rejecting the appeals of the Department/Revenue. That Shri Ram Ashish Yadav, Deputy Manager (Production) and Shri Vinod Rana, Deputy Manager Commercial in their statement dated 09202.20 .....

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nput output norm 1.250 kg DMO: I.000 kg menthol by the Division Office which subsequently correctly re-fixed as 1:1 vide letter ibid. That the order of Commissioner (Appeals) is not proper as he ignored both on the record established fact of, in the first place, adopting fraudulent practices by the respondent to get excess monetary benefit and secondly, re-fixation of input output norms. 5.Personal hearing scheduled 'in this case on 10.0812015. The department applicant made a reply dated 12. .....

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f has granted permission under Notification No. 21/2004-CE(NT) dated 06.09.2004 and has fixed input output norms for the final product namely Menthol as well as Menthol Crystals. 5.2. That the present case was constructed on the issue that the permission order dated 1%08.2009 did not cover menthol crystals for the input stage rebate. That neither in the Show Cause Notice nor in the Order-in-Original nor in Order-in-Appeal there was any dispute with regard to input output ratio fixed vide permiss .....

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party filed appeal with Commissioner (Appeals) much after the re-fixation of input output ratio correctly as 1:1 vide letter dated 04.032011. That the Commissioner (Appeals) has passed an order which is unjust and legally improper to the extend it grants rebate of duty pain on inputs ibid on the basis of input output norms as 1.250:1 fixed and permitted by the Department under C No. V (Misc)Rebate/Notfn.21/04/DB/2/2009/ dated 19.08.2009. 5.4. That the Revenue failed to understand the true natur .....

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pending rebate claims due to delay in refund was also causing prejudice to their commercial interest, hence it was requested that the rebate claims may be immediately allowed as per input output ratio of 1 kg DMO : 1 kg menthol on a condition that the Show Cause Notice may be dropped and the rebate claims that are pending for the sanction may be allowed immediately as they were in need of refund money. 5.5. The party has relied on the following case laws: M/S Ispat Industries Ltd vs CC 236 (Tri) .....

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(Appeals) who rejected the department's appeal. Now the department has filed this Revision Application on grounds mentioned in para 4 above 8.Government further observes that the Commissioner (Appeals) has held that the ground taken by Revenue that mother liquor was used in the factory to obtain menthol as per statements of Shri Ram Ashish Yadav, Deputy Manager (Production) and Shri Vinod Rana, Deputy Manager (Commercial) is not corroborated by the evidences available on record and even the .....

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ish Yadav, Deputy Manager (Production) and Shri Vinod Rana, Deputy Manager (Commercial) in their voluntary statement dated 09.02.2011 under Section 14 of the Central Excise Act, 1944 have categorically admitted that as on date they do not have any stock of mother liquor or any type of menthol waste lying in their factory as all the quantity of mother liquor generated during the course of manufacture of menthol since 2008 has been further reprocessed/recycled within their factory to obtain mentho .....

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Moreover, the statements have not been retracted at any stage. In this regard Government places reliance on the judgement of the Apex Court in the case of Naresh Kumar Sukhwani Vs Union of India 1996(83) ELT 285(SC) that statement made under Section 108 of the Customs Act, 1962 is a material piece of evidence collected by the Customs Officials and can be used as substantive evidence. The provision of Section 108 of the Customs Act, 1962 is para materia with Section 14 of the Central Excise Act, .....

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