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Commissioner of Central Excise & Customs, Chandigarh-ll Versus M/s Ind-Swift Labs Limited.

2016 (7) TMI 434 - GOVERNMENT OF INDIA

Claim of rebate/ refund - input stage rebate - export of goods - The adjudicating authority rejected all the rebate claims of the respondent holding that they failed to get the input output ratio approved in respect of Menthol Crystals as required under Notification No. 21/2004-CE(NT) dated 06109.2004 and rebate claim were not admissible to them as they had failed to fulfill the conditions of Notification ibid. - Commissioner (Appeals) allowed the rebate. - Held that:- it is clear that the r .....

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for menthol crystals, the norms for crystals can be said to have been fixed at the same time as that for menthol. Menthol and menthol crystals are two distinct products classifiable under distinct tariff headings viz 2906 and 3003 respectively as held in the impugned Order-in-Original. It is an uncontested fact that both items not only fall under different headings but the process of manufacture is also different as menthol is in liquid form and menthol crystals are in crystal form. The respond .....

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d goods but in the present case, the respondent exported the goods before the verification of input output ratio as well as fixation of the input output norms. Thus they had failed to satisfy the condition of the Notification ibid. - Claim of rebate denied - Decided against the assessee and in favor of revenue. - F.No.198/40-42/2012-RA - ORDER NO. 29-31/2016-CX - Dated:- 3-2-2016 - BY SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: This revision application is filed by the Commissioner of Central Ex .....

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boratories Limited are engaged in the manufacture of excisable goods falling under Chapter heading no. 29, 30 and 33 of the first schedule to Central Excise Tariff Act, 1985 availing Cenvat Credit facility on the inputs, capital goods and input services which are used in or in relation to manufacture of final products under Cenvat Credit Rules, 2004. The respondent in addition to other excisable goods also manufactures Menthol, Menthol Flakes and Menthol Crystals. These products namely Menthol, .....

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ified), Menthol Bold Crystals [during the period from 27.04.2010 to 31.102010] for export, and filed rebate claims of duty paid on inputs mentioned thereto under the procedure as envisaged under Notification No. 21/2004-CE (NT) dated 06.09.2004 read with Parat V of Chapter 8 of CBEC Supplementary Instructions Manuals on the basis of declaration dated 12.032009 in Annexure 24 filed with the adjudicating authority for fixing input output norms. 2.3. The respondent had earlier filed declaration in .....

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enthol and would be cleared as De-Mentholized Oil Terpenelss. 2.4. The respondent mis-declared that the waste obtain 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 in 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. 2.5. Subsequently input output norms fixed earlier as 1.250 k .....

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procedure laid down under the Notification ibid and cleared quantity of menthol bold crystals and for export without seeking or getting express permission of the Deputy Commissioner of Central Excise and also without fixation of input output ratio in relation thereto. Accordingly, a Show Cause Notice dated 1005.2011 was issued to the respondent. 2.7. The adjudicating authority vide Order-in-Original No. R-602-606/DB/2011 dated 13.06.2011 rejected all the rebate claims of the respondent holding .....

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with consequential relief. 4. Being aggrieved by the impugned Orders-In-Appeal, the department has filed this revision applications under Section 35 EE of Central Excise Act, 1944 before Central Government on the following grounds: 4.1. That the Commissioner (Appeals) has grossly erred in ignoring the fact that the party had themselves voluntarily agreed to vide their letter dated 17.0222011 that rebate be sanctioned as per norms kg DMO to kg menthol and accordingly the norms were re-fixed as 1 .....

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th Commissioner (Appeals) much after the refixation of input output ratio correctly as 1:1 vide letter dated 0403.2011. That the Commissioner (Appeals) has passed an order which is unjust and legally improper to the extent it grants rebate of duty paid on inputs ibid on the basis of input output norms as 1.250 1 fixed and permitted by the department under C.N0. 21/04/DB/2/2009/2747 dated 19.082009. 4.2. That Commissioner (Appeals) in his order has not considered the fact and circumstances which .....

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ntion to claim more amounts of the rebates as in all the ARE -2s they have worked out the amounts of rebates by applying input output ratio as 1.250 kg of DMO for manufacture of 1.000 kg menthol crystal. That while filing the rebate claims they had claimed rebates by applying ratio of 1.000 kg DMO for manufacture of 1.000 kg of menthol crystal. 4.3. That the respondent suppressed the fact of recycling/reprocessing of the mother liquor and other wastes to obtain further menthol from the Departmen .....

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The department applicant made a reply dated 12.09.2012 reiterating the grounds of revision appeal. Shri K. Gurumurthy, Advocate attended the hearing on behalf of the respondent, who stated that the fact of export and duty payment is not disputed. That the Commissioner (Appeals) order is detailed and reasonable and may be upheld. Also the submissions dated 27.06.2012 may be considered wherein following had been submitted: 5.1 That the "Revision Application have been filed with the department .....

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te with regard to input output ratio fixed vide permission order dated 09108.2009 thus the present revision application is not maintainable. 5.3. That the Revenue has taken a ground in its revision application that the Commissioner (Appeals) has grossly erred in ignoring the fact the party had themselves voluntarily agree to vide their letter dated 17.02.2011 that rebate be sanctioned as per the norms kg DMO to 1 kg of Menthol and 1 kg of DMO to 1 kg Menthol Crystals vide letter C.No. V (Misc)Re .....

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at the Revenue failed to understand the true nature and reason for the filing the same. That it was not the case that the party agreed to the ratio 1 kg menthol: 1 kg DMO. That the party in their letter dated 17.02.2011 has contended that as the revenue has already issued a Show Cause Notice on a different issue with regard to eligibility of rebate claim in respect of ARE-2 Nos 3/2009-10 dated 27.102009, 005/2009-10 dated 10.11.2009, 007/2009-10 dated 05.12.2009 and 10/2009-10 dated 19.01.2010 a .....

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the rebate claims that are pending for the sanction may be allowed immediately as they were in need of refund money. 5.6. That the revenue department in its Revision Application has pleaded that the Commissioner (Appeals) in his order has not consider the fact and circumstances which led to re-fixation of input output norms subsequently as 1:1 and grossly erred in simply setting aside the impugned orders passed by the adjudicating authority in its Order-in-Original R-602-606/DB/2011 dated 13.062 .....

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t of fixation of 1:1 is mentioned. That the adjudicating authority had not mentioned any such fact in rest of the two Orders-in-Original. 5.8. That the plea of revenue is incorrect in law. That the Show Cause Notices in the present case did not object to the quantum of ration fixed for input stage rebate claims. 5.9. The patty has relied on the following case laws: M/S Ispat Industries Ltd vs CCE 2012 (280) ELT 236 (Tri) CCE vs Carrier Aircon Ltd 2005 (184) ELT 113 (SC) 6. Government has careful .....

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nal with consequential relief. Now the department has filed this Revision Application on grounds mentioned in para 4 above. 8. Government observes that the basic allegation levelled against the respondent was that they had failed to get approval of input output ratio as required under Notification No. 21/2004-CE(NT) dated 06.09.2004 and cleared the impugned goods viz Menthol Bold Crystals for export without seeking or getting permission of the Deputy Commissioner of Central Excise and also witho .....

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-in-Appeal mainly on the ground that respondent failed to follow the prescribed procedure under Notification No. 21/2004-C.E. (N.T.) dated 06-092004 and also as much as the respondent mis-declared input-output ratio. 9. Government further, observes that the respondent has claimed that the input output ratio was approved by the jurisdictional Deputy Commissioner on 19.08.2009 and 31.01.2011. It is a fact on record that the two sheets to Annexure-24 dated 12.03.2009 submitted by the respondent for .....

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ssion for manufacture and export of menthol crystals under claim for import duty rebate as they has never applied for fixation of input output ratio in respect of Menthol Crystals. The input output ratio for menthol crystals was applied for vide declaration dated 28.06.2010 and thereafter approved vide letter dated 31.01.2011. 10. Government finds as untenable the presumption of Commissioner (Appeals) that as same ratio has been fixed first for menthol and then for menthol crystals, the norms fo .....

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different declaration and get separate approvals for the norms for each product sought to be exported for each product sought to be exported in terms of Notification No. 21/2004-CE(NT) dated 06.09.2004 read with para 2 of part V of Chapter 8 to CBEC Supplementary Instructions Manual. 11. Further, Government observes that as per the Notification No. 21/2004CE(NT) dated 06.09.2004, the declaration is required to be filed before commencement of the exports of goods involved. Para 2 of the said Not .....

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tput ratio for the speedy disposal of pending rebate claims as delay in refund was also causing prejudice to their commercial interest, which is not acceptable as it shows their malafide intention to claim more amounts of the rebates as in all the ARE -2s they have worked out the amounts of rebate by applying input output ratio as 1.250 kg of DMO for manufacture of 1.000 kg menthol crystal. But while filing the rebate claims they had claimed rebates by applying ratio of 1.000 kg 'DMO for man .....

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