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2016 (7) TMI 433 - GOVERNMENT OF INDIA

2016 (7) TMI 433 - GOVERNMENT OF INDIA - TMI - Claim of rebate/refund - export of goods from DTA unit to SEZ units - initially applicant cleared excisable goods without payment of duty under UT-I Bond to the SEZ Unit - However, it was found that the applicants have subsequently paid the duty on the said clearances through CENVAT account by making consolidated debit entry at the end of the respective months of clearances and claimed rebate of duty paid on such clearances. - Department rejected th .....

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ant did not follow the requirements of the Notification No.19/2004-CE(NT), the rebate claims are rightly held inadmissible. - The applicant has also alternatively requested for re credit of cenvat credit. In this regard, Government notes that re credit is allowed in the cases where the exporter was not required to pay duty at the time of export, however, he pays the same. Such amount paid by the exporter in his own volition cannot be retained by the Government and it is required to be paid b .....

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- ORDER NO. 27/2016-CX - Dated:- 29-1-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: This revision application is filed by M/S Radiall India Pvt. Ltd., Bangalore against the Order-in-Appeal No.239/2012-CE dated 24.08.12 passed by the Commissioner of Central Excise (Appeals-I), Bangalore with respect to Order-in-Original passed by the Assistant Commissioner of Central Excise, E-l Division, Bangalore. 2. Brief facts of the cases are that the applicants are registered with Central Excise and en .....

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2001 issued under rule 19 of Central Excise Rules, 2002. However, it was found that the applicants have subsequently paid the duty on the said clearances through CENVAT account by making consolidated debit entry at the end of the respective months of clearances and claimed rebate of duty paid on such clearances. In other words in the five rebate claims claimed, the excisable goods have been cleared under UT-I without payment of duty to SEZ Unit under Rule 19 of Central Excise Rules, 2002 read wi .....

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04 issued under rule 18 of the rules ibid. Therefore it appeared that the applicants cleared the excisable goods to SEZ unit under UT-I Bond without payment of duty under the Notification No.42/2001 CE(N.T.) dated 26.06.2001 and not under the Notification No.19/2004-CE(N.T) dated 06.09.2004 under claim of rebate. As such, it appeared that the applicants have not fulfilled the conditions and limitations prescribed under Notification No.19/2004-CE(N.T) dated 06.09.2004 issued under Rule 18 in resp .....

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. 19/2004-CE (N.T.) dated 06.09.04 issued under Rule 18. 3. Being aggrieved by the said Order-in-Original, applicant filed appeal before Commissioner (Appeals), who rejected the same. 4. Being aggrieved by the impugned Order-In-Appeal, the applicant has filed this Revision Application under Section 35 EE of Central Excise Act, 1944 before Central Government on the following grounds: 4.1 The Commissioner (Appeals) has failed to appreciate that once the factum of payment of duty on the goods " .....

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s, either under Bond or as duty paid goods under claim of rebate under the cover of ARE 1 referred to in Notification No 42/2001 CE (NT) dated 26.06.2001. 4.3 The Applicants have followed the procedure as prescribed under Rule 30 of the SEZ Rules, 2006 for export of goods to SEZ Units. Notification No. 42/2001 CE (NT) issued under Rule 19; as prescribed in Rule 30 of the SEZ Rules, was followed. There is no reference to Notification No. 19/2004 CE (NT) dated 06.09.2004 in Rule 30 of the SEZ Rule .....

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04 CE (NT) with respect to supply of goods to SEZ Units. In fact, The Commissioner (Appeals) cannot show any statutory provisions in Rule 18 and Rule 19 of the Central Excise Rules, 2002 or the Notifications issued there under with respect to supply of goods to SEZ Unit or Developer under claim of rebate or any procedure prescribed for the purpose. The same authorities have denied Rebate of the duty paid on the goods supplied to SEZ on the ground that the same did not constitute physical export .....

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Units under claim for rebate was clouded and confused and was causing serious difficulties to the DTA manufacturers is evident from the CBEC Circular No.6/2010-Cus dated 19.03.2010. The Board has clarified that the clearance of duty free materials for authorized operation in the SEZ is admissible under Section 26 of the SEZ Act, 2005 and it is only the procedure under Rule 18 or Rule 19 of the Central Excise Rules, 2002 adopted to give effect to the statutory provisions of the SEZ Act, as envis .....

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l Excise Rules, 2002 is admittedly only procedural. The substantive conditions are (i) manufacture and export of goods, and (ii) payment of duty on the goods exported. So long as these substantive conditions are fulfilled, the export incentives cannot be denied even if there are procedural lapses. 4.7 The Hon High Court of Rajasthan in the case of Commissioner Vs. Sun City Alloys Pvt Ltd - 2007 (218) ELT 174 (Raj.) has held that if no duty was leviable and the assessee was not required to pay th .....

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s have been denied the use and enjoyment of the amount of from the time of payment of duty and submission of the claims for rebate. The claims for rebate have been rejected in an arbitrary and unjust manner. The Applicants are therefore, entitled to interest under Section IIBB of the Central Excise Act, 1944 for the delay in payment of the rebate amount from the date of expiry of 3 months from the date of submission of application till the date of payment of the rebate amount. 4.9 The applicant .....

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Appeal. It was submitted that for claiming rebate the export of goods should be under Rule 18 ibid and the procedure laid down therein shall be followed. Only then the exporter becomes entitled to rebate. Rule 18 & 19 are not interchangeable nor can be applied at the same. The Commissioner (Appeals) has rightly observe that every procedure has its own checks and balances which cannot be exercised other than at the relevant point of time. In the instant case, the assessee has chosen to clear .....

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tral Excise Rules, 2002 under UT-I Bond. Subsequently, the applicant found to have paid duty on the said clearances through cenvat account by making consolidated debit entry at the end of the respective months of the clearances and claimed rebate of duty paid on such exported goods. Original authority held that whole export has been done under said Rule 19 ibid, however, the claim was filed under Rule 18 ibid; and as such conditions of the Notification No.19/2004-CE (NT) dated 06.09.2004 issued .....

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uch excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation. - "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." The detailed conditions and procedure relating to export without paymen .....

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the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner. (2) Any material may be removed without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be approved by the Commissioner. (3) The export under sub-rule (1) or sub-rule (2) shall be subject to such conditions, safeguards and procedure as may be specified by notificatio .....

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claim for rebate under Rule 18 or for export under bond under Rule 19. These two provisions are two different sets of Rules which provide export benefits to the exporters and applies in different circumstances. The exporter is free to opt for any one of these and once anyone of the options is exercised it attains finality and cannot be reverted back subsequently. In this case it is an undisputed fact that the applicant clears the goods under bond and hence exercised the option to export goods u .....

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ed basis, does not entitle the applicant the rebate claim as the substantial condition of statutory requirements are not met with. It has been rightly held by Commissioner (Appeals) that every system has its checks and balances which cannot be exercised other than at the relevant point of time. 9. Government notes that it is a settled issue that benefit under a conditional notification cannot be extended in case of non-fulfillment of conditions and/or noncompliance of procedure prescribed therei .....

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