TMI Blog2018 (12) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent is not objectionable - refund is allowed. Monetary amount involved in the appeal - Held that:- Except the one appeal no. E/11633/2018 which involve refund amount of ₹ 20,22,895/- in all other appeals, the amount involved is less than 20 lakhs, therefore, all those appeals are not maintainable also in view of Government’s litigation policy issued vide circular no. F.No. 390/Misc/116/2012 dated 11/07/2018. Appeal allowed in part. - Appeal No. E/1580/2009, E/11631-11634/2018-DB - A/12421-12425/2018 - Dated:- 7-9-2018 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) For the appellant: Shri K.J. Kinariwala, Asst. Commr. (AR). For the respondent: Shri Mukund Chouhan, CA ORDER Per: Ramesh Nair The common facts involved in all the appeals are that the respondent, is manufacturer of stationary items falling under chapter 48 of Central Excise Tariff Act, 1985. They had exported Notebooks and Exercise Books which are exempted from the Central Excise Duty. The goods were removed under Bond/LUT. They had availed Cenvat Credit under Cenvat Credit Rules, 2004 on the inputs used in the manufacture of the said final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods under Bond and the LUT allowed the export. Therefore, the export of goods under bond/ LUT is not under dispute. As per Rule 6 (6) (v) it is provided that if the goods are exported under Bond/LUT Rule 6 (1), (2) and (3) are not applicable and the fact of the same is that though the goods manufactured and exported by the respondent is exempted but they are entitled for the Cenvat Credit in respect of inputs. It is also observed that as per notification 42/2001-CE (N.T.) dated 26/06/2001, manufacturer, exporter is required to export all excisable goods under Bond/ LUT. Therefore, even though the finished goods are exempted, the same is allowed to be exported under Bond/ LUT. Therefore, the availment of Cenvat Credit by the respondent is not objectionable. Consequently, refund of the same is also admissible in terms of Rule 5 of Cenvat Credit Rules, 2004. The Ld. Commissioner (A) has given a detailed finding which is as under: 4. The case was posted for Personal Hearing. Shri Mukund Chauhan, C.A, appeared for the Appellants on 2.7.09 and was heard. He reiterated the arguments as made in the appeal memorandum. The main points submitted by him are as follows :- i) Rule 6( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as applicable in terms of which the bar provided under Rule 6(1) ibid for non-availme t of cenvat credit on inputs used in exempted goods is not applicable in such cases. It was also held in the said judgment that cenvat credit was available in respect of inputs used in the manufacture of final products being exported irrespective of the fact that the final products are otherwise exempt. He also cited the decisions of the Hon ble Delhi High Court in the case of CCE, Delhi-I v/s Punjab Stainless Steel - 2009 (234) ELT 605 (Del), Tufropes Pvt Ltd v/s CCE, Vapi reported in 2009 (233) ELT 544 (Tri.-Ahmd), Jyoti Capsules v/s CCE, Kanpur - 2009 (236) ELT 667 (Tri-Del) and Jobelle v/s CCE, Mumbai-I - 2006 (203) ELT 627 (Tri-Mum) wherein similar view had been taken by the concerned Courts (Tribunals). v) Keeping in view the ratio of the decisions of various Courts/Tribunals on the issues involved in the present case as mentioned above, several of which were also cited at the original stage, following the principles of judicial discipline, the lower authority was required to decide the matter accordingly. However, without discussing the applicability of these decisions, the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted goods can be exported under Bond /LUT? (ii) a) Whether clause (v) of sub Rule 6 of Rule 6 of Cenvat Credit Rules 2004, which bars the applicability of rules 6(1), (2) and (3) ibid is applicable to the export of exempted goods under Bond!LUT and whether cenvat credit could have been availed by the appellants in respect of inputs used in the manufacture of exempted goods exported. b) Whether CBEC Circular No.754/70/2003-CX dated 09.10.2003 in which it has been clarified that no credit can be taken on inputs/inputs services which are exclusively used in or in relation to the manufacture of final products is applicable in the present case. (iii) Whether refund under Rule 5 of Cenvat Credit Rules, 2004 is admissible in respect of Cenvat Credit availed on inputs used in the manufacture of exempted goods which are exported under Bond/LUT. (iv) Whether the lower authority violated the principles of judicial discipline in passing the present impugned orders. 6. With regard to issue (i) in Para 5.1 above, regarding export of exempted goods under Bond/ LUT, I find that in an earlier case of the same Appellant, the above issue was decided by Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E1376-386/08 resulting in rejection of the Appeal filed by the department. The Appellants have contended that the Department has not filed any appeal against the Tribunal s said decision. There is nothing on record to the contrary. In the circumstances the said issue has become final vis- -vis the present appellants and it was neither correct nor proper for the lower authority to have taken a different view. 7. Similarly with regard to the issue at (ii)(a) in Para 5.1 above, it is observed that a similar issue was involved in a refund claim of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules 2004 pertaining to an earlier period which was rejected by the Deputy Commissioner Olpad, interalia, on the ground that as per rule 6(1) of Cenvat Credit Rules, Cenvat credit shall not be allowed on such quantity of input or input services which is used in the manufacture of exempted goods or exempted service and when Cenvat credit itself is not allowed, the question of accumulation and refund of same does not arise. On appeal by the party (appellants herein), the related 010 was set aside by Commissioner (Appeal), Surat-Il vide OJA No. RS/195/SRT-II/2006 dated 12.06.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these cases, I find that the reliance placed by the appellants on the said decisions in the present context is appropriate and the ratio of these is applicable to the present case. 7.2 As regards the issue at (ii)b of Para 5.1 above, namely, the applicability of CBEC Circular No.754/70/2003-CX dated 09.10.2003 to the present matter, the said circular clarifies that no credit can be taken on inputs which are exclusively used in or in relation to the manufacture of final products. In the present case the appellants are manufacturing both exempted goods and dutiable goods. As provided under Rule 6 (2) of Cenvat Credit Rules, 2004, they are availing Cenvat credit of the duty on the common inputs used in the manufacture of both exempted goods and dutiable goods and are maintaining separate accounts as required under the said Rule. While they avail Cenvat on inputs used in exempted goods exported, they do not avail Cenvat on inputs used in exempted goods cleared for domestic clearance on nil duty. As the present case is not one where the appellants are taking credit on inputs which are exclusively used in or in relation to the manufacture of exempted final products, the said circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id on the inputs. and utilize it in the payment of duty on final product. The above general observations of the Hon ble Apex Court in the Inchalkaranji Machine Centre case and similar observations in the Eicher Motor Ltd., case have been interpreted by the Adjudication authority as implying that Cenvat Credit was not admissible in respect of exempted goods exported under Bond/LUT and for non admissibility of refund under Rule 5 of Cenvat Credit Rule, 2004 in respect of accumulated credit. However, no reasoning has been given by him as to how these inferences follow from the general observations of the Hon ble Apex Court as above and why the specific provisions and judicial decisions on the specific issues involved that were cited before him in the matter would not be applicable. It is well settled that judicial decisions lay down a precedent/ratio in respect of the particular issue that is decided in that case. While the observations of the Hon ble Apex Court in course of its judgments are in the nature of obiter dicta and have persuasive value while interpreting law, yet these cannot be interpreted out of context, and without giving any reasoning as to why a particular inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants were eligible to avail the Cenvat credit (on inputs in question) and refund of accumulated Cenvat credit under rule 5 ibid (subject to fulfillment of the conditions laid down therein), the Adjudicating Authority s order taking a different view in the present cases is violative of the principle of judicial discipline. In this context, the reliance placed by the appellants on the decision of the Apex Court in the case of CCE, Hyderabad v/s Novapan Industries Ltd - 2007 (209) ELT 161 (SC) is apt. The importance of judicial discipline in quasi judicial proceeding is brought out succinctly in the following extract from the Apex Court judgment in the case of UoI v/s Kamlakshi Finance Corporation Ltd reported in 1991 (55) E.L.T. 433 (S.C.) which the lower authority has failed to follow in the present case. - It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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