TMI Blog2019 (8) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 2 (d) of the Act would have to be read as the Central Excise Rules 2002, do not define the word 'excisable goods'. However, under Rule 2 (i) of the Central Excise Rules 2002, words and expressions used under the Rules but not defined, shall carry the same meaning as has been assigned to under the Act. Clearly for any goods to be described as 'excisable goods', the requirement is that they must be such as have been specified in the first schedule or the second schedule ( prior to the amendment made in 2017). LCD panels and parts were admittedly so specified. Therefore, the goods in question were clearly 'excisable goods' and therefore entitled to rebate. What then arises for consideration is whether there was any duty paid on such 'excisable goods'. Undisputedly, the goods had suffered countervailing duty and therefore by virtue of Rule 3 (1) (vii) of the CENVAT Rules 2004, it was eligible to CENVAT Credit. It cannot therefore, be said that goods did not suffer any duty for the purpose of Rule 18. Thereafter, only the conditions and limitations provided under the excise notification remained to be fulfilled - in view of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er would submit that the petitioner is an international manufacturer of electronic goods, i.e. coloured television sets, air conditioner, computer monitors etc. falling under Chapter 84-85 of the Central Excise Act, 1985. During the period 2007-08, it had imported certain LCD panels and parts used in manufacture of coloured televisions from outside the country. On such imports, it had paid custom duties; additional custom duties and countervailing duty. By virtue of Rule 3 (vii) of the Cenvat Credit Rules 2004, the petitioner became entitled to avail CENVAT credit on the countervailing duty so paid, upto the amount specified under those Rules. 4. The petitioner made use of LCD panels and parts in the manufacturing activity conducted by it at its factory at Noida. However, owing to its business arrangements, some of those imported LCD panels and parts were not subjected to manufacturing activity inside the country but the same were re-exported to other manufacturing locations outside the country, in the same form and condition i.e. without subjecting those parts to any manufacturing or processing. Since such LCD panels and parts were being removed from its factory a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit availed under the CENVAT Rule (at the time of import) was payment of duty, inasmuch as that reversal of CENVAT was nothing but payment of countervailing duty which was equivalent to the central excise duty. 6. Learned counsel for the petitioner would further submit that there is no requirement of actual manufacture as a pre-condition of grant of rebate inside the country under Rule 18 of the Central Excise Rules, 2002 read with relevant notification No.19/2004. Such a condition, therefore, can never be introduced by implication or by any interpretatiive process. Then referring to the pre-existing MODVAT Rules and the Circular No.283/117/96 dated 31.12.1996 issued thereunder, it has been submitted Rule 57 F (1) (ii) of the pre-existing MODVAT Rules was pari materia to Rule 3 (5) of the CENVAT Credit Rules 2004 under that preexisting Rule, circular dated 31.12.1996, was issued by the Central Government. Thereunder, for grant of rebate in case of such re-export of goods, there was no condition of actual manufacture. In that regard, reliance has been placed on a decision of Bombay High Court in Commissioner of Central Excise RAIGAD Vs. Micro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9. 10. Also, Clause 2 of notification No.19 of 2004 dated 6.9.2004 read as below: (2) Conditions and limitations:- (a) that the excisable goods shall be exported after payment of duty, directly from a factory or warehouse, except as otherwise permitted by the Central Board of Excise and Customs by a general or special order; (b) the excisable goods shall be exported within six months from the date on which they were cleared for export from the factory of manufacture or warehouse or within such extended period as the Commissioner of Central Excise may in any particular case allow; (c) that the excisable goods supplied as ship's stores for consumption on board a vessel bound for any foreign port are in such quantities as the Commissioner of Customs at the port of shipment may consider reasonable; (d) the rebate claim by filing electronic declaration shall be allowed from such place of export and such date, as may be specified by the Board in this behalf; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty and therefore by virtue of Rule 3 (1) (vii) of the CENVAT Rules 2004, it was eligible to CENVAT Credit. It cannot therefore, be said that goods did not suffer any duty for the purpose of Rule 18. Thereafter, only the conditions and limitations provided under the excise notification remained to be fulfilled. Here, in view of the fact that it is again undisputed that the CENVAT Credit availed had been reversed in entirety under Rules of 2004, the goods that were excisable goods clearly came to be exported after payment of duty. There is no dispute to the fact that they were exported directly by the petitioner to its other manufacturing units outside the country. 14. The objection raised by the revenue-respondent that the export must have been made after manufacture, is not substantiated by the statutory provisions. The words a 'factory' used in clause 2 (a) of the rebate notification only refers to the fact that the goods must be exported from a premises that is a 'factory'. Again, the term 'factory' has not been defined under Rules under Section 2 (e) of the Act. It reads:- (e) factory means any premises, including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Taking note of Rule 3 of the CENVAT Credit Rules 2002, that Court further reasoned that a manufacturer who takes credit of duty paid on inputs/capital goods, and subsequently, removes such inputs/capital goods without utilizing the same in manufacture of any final product, is required to pay an amount equal to the duty of excise leviable on such inputs/capital goods, in view of Rule 3(4) and (5) of the CENVAT Rules. Once that duty is paid, it is liable to be treated as duty paid on clearance of inputs/capital goods. Then referring to circular no.283 of 1996 issued under the MODVAT scheme and considering the pari materia provisions of Rule 57F(1)(ii) of the Central Excise Rules, 1944 and Rule 3(4) of the CENVAT Credit Rules, 2004, the rebate of duty on exported inputs/capital goods was held allowable treating the exporter to be the deemed manufacturer. It was clarified that reversal of CENVAT Credit amounted to duty payment. The same reasoning was adopted by the Bombay High Court in the case of Union of India Vs Sterlite Industries (I) Limited 2017 (354) ELT 87 (Bom.), in that case the assessee had imported used aluminium casting machine as cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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