TMI Blog2021 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... of inputs',as per Rules 3, 4 and 7 of Cenvat Credit Rules, 2004. They were not brought to the factory for being remade, refined, re-conditioned or for any other reason in terms of Rule 16 of C.E.R, 2002. The analysis of the relevant provisions under Section 11B of C.E.A, 1944, Rule 16, 18 and 19 of C.E.R., 2002 and Rule 2, 3, 4, 7 of Cenvat Credit Rules, 2004, discussed above, leave no room of doubt that the receipt of finished goods upon re- importation in the factory of the appellant, as claimed, were not in the form of inputs / raw materials for use in the process of manufacture. As such finished goods were not brought into the factory for being re-made, refined, re-conditioned or for any other reason. If such goods were not inputs or raw materials upon which the assessee was entitled to claim Cenvat Credit upon payment of additional duty (CVD) under Customs Tariff Act, 1975, the assessee could not have claimed refund thereof from the Central Excise Authorities invoking Section 11B of C.E.A, 1944 read with Rule 16 of C.E.R, 2002. The application for refund of countervailing duty is maintainable under section 11B of Central Excise Act, provided it satisfies the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case and in law, an application for refund of countervailing duty is maintainable under Section 11B of the Central Excise Act? b. Whether in the facts and circumstances of the case, the order passed by learned CESTAT is bad in law and on facts? Case of the Appellant: The appellant is a Company within the meaning of Companies Act, 1956 engaged in the manufacture of Excisable goods, Opal Glassware and Kitchenware falling under Central Excise Sub-heading No. 7013 2900 / 7013 3900 respectively. During the course of business, appellant exported 880 dinner sets (124 pieces) valued at ₹ 33,50,160.00 and 1050 dinner sets (26 pieces) valued at ₹ 11,59,725.00 against ARE-1 No. 01/2009-10 dated 10.06.2009 to M/s Kaspian Kalay Giti, Tehran, Iran under General Bond No. 31/MC-Kol/2009-10 dated 22.04.2009. The buyer vide letter dated 04.10.2009 informed the appellant to take back all the containers as they were not able to clear the same from customs and take delivery. On return of the goods on Kolkata Port, goods were cleared on payment of countervailing duty (CVD) amounting to ₹ 4,28,424.00 only as allowed by the Customs authorities vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise duty. It is also averred that Cenvat Credit of CVD is allowed under C.C.R, 2004. That the re-imported goods were cleared for home consumption after re-packaging on payment of duty which would be treated as inputs under Cenvat Credit Rules, 2004. Since refund of CVD can be made only under the provisions of Central Excise Act and Rules, therefore, the Adjudicating Authority sanctioned the refund.The appellant claims to have filed the following documents before the learned Tribunal (a) Appeal and the Stay Application of the appellant against the Order dated 16.04.2012 passed by the Ld. Commissioner (Appeals) of Central Excise Service Tax, Ranchi (b) Order-in-Original dated 29.09.2010; (c) Order-in-Appeal 19/RAN/2012 dated 16.04.2012 (d) Memorandum of Cross-Objection of the appellant; (e) Stay Order of the Tribunal dated 10.09.2012 (f) Final Order of the Tribunal dated 29.05.2017 Learned Tribunal dismissed the appeal upon hearing the counsel for the parties and upon consideration of the appeal records, holding that the Commissioner (Appeals) rightly observed that the refund claimed under Section 11B is not maintainable. 3. Learned counsel for the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid at the time of home consumption of the said goods. Case of the Respondent 4. On the part of the Revenue, the following stand has been taken. That the learned Tribunal has passed the impugned order, as per correct interpretation of law. The CVD is a duty of Customs and governed by the Customs Act. It is levied and collected at Kolkata Customs. The Claimant has submitted refund claim of CVD under the provisions of Section 11B of Central Excise Act, 1944. That the appellant had exported the consignment to Tehran, under Bond without payment of duty. Since the buyer did not receive the goods, appellant took back the returned goods on payment of CVD. In reply to para-9 of the Memo of Appeal, it is stated that the appellant has nowhere mentioned that he had filed refund claim of CVD at Kolkata Port. As per Rule 16 of C.E.R, 2002, when any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall be entitled to take Cenvat Credit of the duty paid thereon, if such goods are received as inputs under the Cenvat Credit Rules, 2004. 5. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 (40 of 1991), such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act: Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ............................................................................................... Section 12 A reads as under:- Section 12-A. Price of goods to indicate the amount of duty paid thereon.- Notwithstanding anything contained in this Act or any other law for the time being in force, every person who is liable to pay duty of excise on any goods shall, at the time of clearance of the goods, prominently indicate in all the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold. 7. As per section 11-B, any person claiming refund of any duty of excise and interest, if any, paid on such duty, may make an application for refund of such duty, before the expiry of one year from the relevant date in such form and manner, as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section (12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid in relation to which such refund is claimed was collected from or paid by him and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e article if produced or manufactured in India. For the purposes of the appreciation of the case at hand, section 3 of the Customs Tariff Act, 1975 is quoted hereunder: 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges.-- (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article: Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the Official Gazette, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced or manufactured in different States or, if a like alcoholic liquor is not produced or manufactured in any State, then, having regard to the excise duty wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of removal thereof are brought to any factory for being re-made, refined, re- conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub- rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods. (3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Act;] [(C) capital goods, except when,- (i) used as parts or components in the manufacture of a final product; or (ii) the value of such capital goods is up to ten thousand rupees per piece;] (D) motor vehicles; (E) any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. ................................................................................................................. RULE 3. CENVAT credit. -- (1) A manufacturer or producer of final products or a [provider of output service] shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of - (i)........................... (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that the additional duty leviable under section 3 of the Customs Tariff Act, is equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via) and are eligible to be taken as Cenvat Credit by a Manufacturer or producer of final products or a provider of output service. Sub-rule (4) thereof specifies as to where Cenvat Credit may be utilized for payment. 12. Learned counsel for the appellant has by placing reliance upon the decision of Delhi High Court in the case of Commissioner of Central Excise, Delhi-I (Supra) and that of Punjab Haryana High Court in the case of Simplex PharmaPvt. Ltd (Supra) has argued that additional duty under section 3 of the Customs Tariff Act, 1975 is treated as countervailing duty and is permitted to be taken as Cenvat Credit under rule 3 of Cenvat Credit Rules, 2004. Further, in terms of section 11B of C.E.A, 1944 read with Rule 16 of C.E.R, 2002, appellant is entitled to claim refund of unutilized Cenvat Credit. It is true that additional duty levied under section 3 of Customs Tariff Act, 1975 is in the nature of a countervailing duty to protect the interest of the domestic manufacturers and it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y notification by the Board. 13. In the light of the statutory provisions discussed above, in the present case, finished goods were exported against ARE-1 No. 01/2009-10 dated 10.06.2009 under General Bond No. 31/MC-Kol/2009-10 dated 22.04.2009. Goods were returned by the foreign buyer as it could not get clearance of the Customs and take its delivery. As such, the wholly finished goods were returned back to Kolkata Port. On re-importation of the finished goods, Customs authorities allowed clearance of the goods on payment of additional duty amounting to ₹ 4,28,424/- vide Bill of Entry No. 518266 dated 09.01.2010. Receipt of such goods in the appellant's factory was also intimated to the Superintendent of Central Excise, Madhupur. Appellant thereafter claims to have filed a refund claim of CVD paid at Kolkata Port, stating that they are entitled to take credit amount of CVD paid by them on return of the goods under Rule 16 of the Central Excise Rules, 2002 as they did not claim any export benefit and the goods were also cleared under Rule-19 of C.E.R, 2002 on execution of bond and without payment of duty. 14. Respondent in their counter affidavit have categorical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for rebate / refund for countervailing duty or additional duty paid on the inputs utilized for manufacture. Those applications were made under Rule 18 of C.E.R., 2002 read with Notification No. 21/2004-CE(NT) dated 06th September 2004. In some cases, applications were dismissed and other applications were allowed. The matters were taken up in appeals before the Commissioner (Appeals) and were made subject matter of the Revision petitions under Section 35EE of the C.E.A, 1944. The Central Government had held that the Respondent No. 2 - assessees are entitled to rebate/refund of CVD paid on the inputs. The contention of the Revenue was that CVD paid is not excise duty as such. The Central Excise Act, 1944 is a separate Act and rebate / refund of excise duty on exports is governed by the notification and the language of the notification under which the said rebate/refund can be granted. It was submitted by the Revenue that the Notification No. 21/2004 dated 6th September 2004 postulated and stipulated that the refund / rebate of duty could be claimed but it was restricted to the duty paid under the specified enactments namely, C.E.A, 1944, Additional Duties of Excise (Goods or Spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the rebate of countervailing duty paid on inputs/materials used in the manufacture of exported goods is admissible to the applicants under Rule 18 of C.E.R, 2002 read with Notification No. 21/2004 dated 6th September 2004, provided no Cenvat Credit or drawback is availed by the applicants. Learned Division Bench of Delhi High Court noticed the reasoning given by the Joint Secretary in its order and also referred to Rule 18 of C.E.R, 2002, Rule 3 and 5 of Cenvat Credit Rules, 2004 and also the judgment on the nature of additional duty imposed under section 3 of Customs Tariff Act, 1975 and held that the amendment Notification No. 12/2007 fully applied to all cases and there was no discrimination. Even without the aforesaid notification, there was a valid and good case to include and treat CVD as a duty covered by the Notification No. 21/2004. The detailed reasoning and logic in the findings given by the Joint Secretary-Revisionary Authority was appreciated after independent application of mind and found worthy of acceptance. Writ petitions preferred by the Commissioner of Central Excise against the order of Revisionary Authority was dismissed. 16. In the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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