TMI Blog2023 (10) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... e record a copy of its letter dated 08 January 2004 and it is not clear if the said letter pertained to any request about fixation of input-output norms with regards to export obligations already undertaken or to be taken in future. Applicability of central excise duty on removal of waste/scraps generated during the course of the manufacture of S.S. Utensils etc. - HELD THAT:- A careful perusal of the notification No. 41/2001 dated 26 June 2001 would show that the exporter has to furnish a declaration that CENVAT credit has not been availed and the notification clearly spells out that any waste arising during the manufacture of export goods may be removed on payment of duty as if such waste has been manufactured in the factory of the manufacture - the removal of waste, or sale thereof in home or domestic market, does not prohibit or bar a claim for rebate under the said Rule or notification. Paragraph 4(c) does refer to payment of duty but the said clause applies when there is removal of material or the same is partially processed at a location different from or outside the factory of the applicant. Since presumably the export obligations had been met, the Revisionary Authority too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year 2004 pertaining to the period from September 2003 to March 2004, thereby seeking rebate of duty amounting to a total of Rs. 97,71,926/- that was claimed to have been paid on the inputs used in the manufacturing of the end product. It is stated that the Rebate Claims were lodged in terms of Rule 18 of the CER and in terms of Notification No. 41/2001 dated 26 June 2001. All the relevant documents were submitted with the respondent except that a request was also made by the petitioner to condone the procedural lapse of filing A.R.E. 1 instead of A.R.E. 2 besides submitting a request for fixation of the input-output norms in terms applicable during the export period in terms of letter from the Office of Assistant Commissioner, Central Excise dated 18 March 2004 [C. No. V(87)18/REF/IO/PJS/D-I/2003] . 3. To cut the long story short, six Orders-in-Original dated 30 July 2008 were passed separately by the Adjudicating Authority, thereby granting total refund amounting to Rs. 49,15,971/-. Aggrieved thereby the petitioner filed an appeal before the Commissioner (Appeal) on 06 January 2009 which was dismissed in limine vide order dated 29 September 2009 primarily for the same being tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the matter. The procedural requirement as provided in the notification no. 41/2001 dated 26.06.2001 specifies that (1) the ratio of input and output has to be mentioned in the prescribed declaration before the commencement of export of such goods. (2) the jurisdictional Assistant Commissioner has to call for sample or even carry out an inspection in factory or process to satisfy the correctness of claim. Since the impugned goods were exported prior to fixation of the special input/output norms for steel flats by the jurisdictional central excise authorities, the mandatory conditions of Notification No. 41/2001 dated 26.06.2001 regarding declaration and subsequent verification remain unfulfilled. These are substantive conditions of Notification No. 41/2001 dated 26.06.2001 for claiming rebate under Rule 18 of Central Excise Rules, 2002. Hon'ble CESTAT in the case of M/s Arun Intomational Vs CCE [2015 (317) ELT 465 (TRI-DEL)] has held that non-declaration of Input-output ratio in respect of export of fully exempted steel utensils manufactured from duty paid inputs is a substantive condition of notification 41/2001 and is not condonable . The above judgement squarely covers the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms 1.882:1 Rebate Claim allowed as per SION norms fixed by DGFT 1.30:1 Reduction in claim by change in SION norms. 1. 218-R Rs. 14,76,143 Rs. 10,46,193 Rs. 4,29,950 2. 219-R Rs. 13,78,593 Rs. 9,51,614 Rs. 4,26,979 3. 220-R Rs. 18,23,931 Rs. 13,87,353 Rs. 4,36,578 4. 221-R Rs. 17,68,788 Rs. 12,21,775 Rs. 5,47,013 5. 222-R Rs. 14,04,633 Rs. 6,95,199 Rs. 7,09,434 6. 223-R Rs. 19,19,838 Rs. 13,60,755 Rs. 5,59,083 Total Rs. 31,09,037 REPLY BY THE RESPONDENT: 6. On behalf of respondent No. 2, Mr. Aman Singla, Assistant Commissioner, Central Goods Service Tax (North), Delhi, has filed a short affidavit and the stand of the department is reiterated that the petitioner filed declaration as per ARE-1 in terms of notification No. 41/2001 dated 26 June 2001 that made application of input-output norms applicable as existing at the time of exports; and that it was mandatory for the exporter to file a declaration containing details, inter alia, about the manufacturing formula with particular reference to quantity or proportion to which raw material were actually used as well as about the quality before commencement of export of such goods, but the assessee/petitioner failed to file the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.00 Export goods Manufactured out of S.S. Flats 2. S.S. Utensils/ Kitchenware 1.882 1.00 Export Goods Manufactured out of S.S. INGOTS 3. S.S. Utensils/ Kitchenware 1.901 1.00 10. There is no gainsaying that the fixation of input output norms is done to enable the manufacturer exporters to seek rebate for the inputs used in the export of the manufactured product. Admittedly, the goods had been duly exported presumably meeting with all the relevant regulatory norms between the period September, 2003 to January, 2004. It is pertinent to indicate that two rebate claims were filed on 07 January 2004 and third one on 01 March 2004, whereas, the rest of the three were filed after the aforesaid communication dated 18 March 2004. However, the petitioner has not placed on the record a copy of its letter dated 08 January 2004 and it is not clear if the said letter pertained to any request about fixation of input-output norms with regards to export obligations already undertaken or to be taken in future. The issues are further confounded since it is also not clear as from which date the norms specified vide aforesaid communique had been made applicable. Be that as it may, ordinarily the input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io of input and output mentioned in the declaration filed before commencement of export of such goods, if necessary, by calling for samples of finished goods or by inspecting such goods in the factory of manufacture or process. If, after such verification, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise is also satisfied that there is no likelihood of evasion of duty, he may grant permission to the applicant for manufacture or processing and export of finished goods. (3) Procurement of material: - The manufacturer or processor shall obtain the materials to be utilized in the manufacture of the finished goods intended for export directly from the registered factory in which such goods are produced, accompanied by an invoice under Rule 11 of the Central Excise (No. 2) Rules, 2001: Provided that the manufacturer or processor may procure materials from dealers registered for the purposes of CENVAT Credit Rules, 2001 under invoices issued by such dealers. (4) Removal of materials or partially processed material for processing.- The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise may permit a manufacturer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced by the learned counsel for the petitioner that Para 4 (c) of the notification 41/2001 dated 26 June 2001 also specifies that even in the case of waste from manufacturing process outside the factory of the applicant seeking rebate, the removal of such waste or sale thereof is neither prohibited nor it debars a claim for rebate under the said rule or notification. Undoubtedly, the form and declaration have to be examined, but what is significant is the interpretation of the words not availed of facility of CENVAT Credit in the form/declaration. Therefore, what follows is that removal of waste, or sale thereof in home or domestic market, does not prohibit or bar a claim for rebate under the said Rule or notification. Paragraph 4(c) does refer to payment of duty but the said clause applies when there is removal of material or the same is partially processed at a location different from or outside the factory of the applicant. 14. Further, it is also pertinent to mention that in terms of notification No. 10/2003-Central Excise dated 01 March 2003 1 , brought out in exercise of power under Sub-section (1) of Section 5A of the Central Excise Act, 1944, certain items have been exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or substance of the notification granting exemption. 16. Reverting to the instant matter, since presumably the export obligations had been met, the Revisionary Authority took a hyper technical view of the matter. It is evident that in terms of the notification No. 10/2003 dated 01 March 2003, the description of the goods in question was covered vide item No. 28 viz. HSM 7323.90, which is code for S.S. Utensils, read with item No. 51, where the rate of duty is spelt out to be NIL . Meaning thereby that no duty was payable on such waste and scrap arising during the course of manufacture of the same goods. This is exemplified from the clarification letter issued by the Office of Commissioner of Central Excise, Delhi dated 26 July 2005 placed on the record, and therefore, the impugned order dated 27 September 2019 holding that pre-conditions provided by the Notification No. 41/2001 dated 26 June 2001 were not met by the petitioner, is perverse and cannot be sustained in law. 17. In view of the foregoing discussion, the impugned order dated 27 September 2019 is hereby set aside and the matter is remanded back to the Adjudicating Authority to decide the rebate claims of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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