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TMI Blog2023 (9) TMI 1574X X X X Extracts X X X X X X X X Extracts X X X X ..... etting aside the order dated 10th June 2021 passed by the respondent No.2, whereby the revision application filed by the petitioner against the Order-in-Appeal No.76 to 79/2013 dated 26th March 2013 and Order-in-Appeal No.132 to 133/2013 dated 25th June 2013 passed by the Commissioner (Appeals) of Central Excise, Ahmedabad have been rejected upholding the partial rejection of rebate claims filed by the petitioner under Rule 18 of the Central Excise Rules, 2002. [3] Since the issue arising in all these petitions with regard to rejection of rebate claims of the petitioners under Rule 18 of the Rules is the same, those were heard analogously and are being disposed of by this common judgement and order. [4] For the sake of convenience, R/Special Civil Application No.13069 of 2022 is treated as the lead matter. [5] The brief facts of the case are that the petitioner is a manufacturer and exporter of pharmaceutical products such as medicaments, which fall under Chapter Heading 3004 of the First Schedule to the Central Excise Tariff Act, 1985. During the relevant period, the petitioner was availing the benefit of CENVAT credit on central excise duty or service tax paid on inputs, capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (1) 14% under Notification No. 2/2008-CE dated 1st March 2008 and (ii) 8% under Notification No.4/2008-CE dated 1st March 2008 (amending Notification No. 4/2006-CE dated 01.03.2006) [5.3.4] Vide subsequent Notifications, the rates under both the subject Notifications viz. Notification No.2/2008-CE dated 1st March 2008 and Notification No.4/2008-CE dated 1st March 2008 (amending Notification No.4/2006-CE dated 1st March 2006) were changed. The rates prevailing during the period 2008 to 2011 can be summarized as under: Period Rate of duty as per First Schedule to Central Excise Tariff Act, 1985 Rate of duty as per Notification No.2/2008-CE dated 1st March 2008 (as amended further from time to time) Rate of duty as per Notification No.4/2006-CE dated 1st March 2006 (as amended by Notification No.4/2008-CE dated 1st March 2008 and further amendments from time to time) 01.03.2008 to 06.12.2008 16% 14% 8% 07.12.2008 to 03.02.2009 16% 10% 4% 04.02.2009 to 26.02.2009 16% 8% 4% 27.02.2010 to 01.03.2011 16% 10% 4% 01.03.2011 onwards 16% 10% 5% [5.4] During the relevant period viz. February 2012 to March 2012, as against the duty of 16% prescribed in the First Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner could not have discharged duty at the rate of 10% on exported goods under Notification No. 2/2008- CE dated 1st March 2006 (as amended from time to time) when the same goods were eligible for duty rate of 5% under Notification No.4/2006-CE (as amended from time to time) and based on such findings, the Assistant Commissioner partially rejected the rebate claims of the petitioner and granted cash rebate only to the extent of 5% and the remaining excise duty paid on the exported goods was alleged to be excess duty paid and granted as re-credit into the CENVAT credit account of the petitioner. [5.9] The Assistant Commissioner in the Orders-in-Original also reduced the rebate claimed by the petitioner on the ground that the petitioner had paid excess central excise duty on the exported goods by paying excise duty on the CIF value i.e. cost + insurance + freight, whereas excise duty was payable only on the FOB value without insurance or freight. However, where the FOB value was higher than the CIF value, the Assistant Commissioner has arbitrarily chosen to accept the higher of the two values to deny rebate claim to such extent on the ground of excess valuation. Thus, the Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of this Court in the case of Arvind Ltd vs. Union of India, 2014 (300) ELT 481 (Guj) which was affirmed by the Hon'ble Supreme Court in Union of India vs. Arvind Ltd reported in 2017 (352) ELT A21(SC), observed that the assessee is not prevented from availing the benefit of two separate exemption notification simultaneously for export and domestic clearances of the same goods. [7] The respondent No.2, vide impugned order dated 10th June 2021, rejected the aforesaid revision application filed by the petitioner against the Orders-in-Appeal dated 26th March 2013 and 25th June 2013 and upheld the partial rejection of rebate claims on the following grounds: (a) Availing benefit of two notifications simultaneously for domestic and export clearance of the same finished goods is not permissible as per law, without maintaining separate accounts of inputs. (b) Considering the judgment of this Hon'ble Court in the case of Arvind Mills Ltd. (supra), it is observed that the High Court held that when there are two exemption notifications which co-exist, the assessee can avail one for domestic clearance and the other one which is beneficial to them for exports so as to obtain refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed by the petitioner against rejection of rebate claim on identical grounds by following the said judgement of this Court. It was submitted that in the impugned order, the respondent No.2 grossly erred in observing that where two different Notifications prescribing different concessional rates co-exist, the assessee must choose to avail the benefit of only one of them for both domestic clearances as well as exports. However, there is no obligation or compulsion in the Act, which mandates the assessee to necessarily opt for the Notification, which prescribes lower rate or vice versa for both types of clearances i.e. domestic as well as export. [9.2] It was, therefore, submitted that under the Act, Rules and the subject Notifications, there is no obligation to avail benefit of one Notification only in respect of the goods cleared for home consumption and goods cleared for exports. [9.3] It was submitted that this position of law is made clear and was considered by this Court in the case of Arvind Limited (supra), wherein it is held that when two exemption Notifications co-exist, the assessee can avail the one for domestic clearance and the other one which is beneficial to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dency of earlier three petitions, the Goods and Services Tax regime was introduced on 1st July 2017 and thereafter, the Central Goods and Service Tax regime was in respect of the three earlier petitions under the GST regime with effect from 1st July 2017. As per Section 142(3) of the CGST Act, 2017, the pending litigation is required to be disposed of in accordance with the provisions of existing law and any amount accruing to the assessee should be paid in cash. It was submitted that in view of the provisions of Section 140(3) of the CGST Act, 2017, the portion of rebate claims rejected by the impugned order and undisputedly allowed as CENVAT re-credit to the petitioner, are also liable to be sanctioned in cash inasmuch as the CENVAT credit account no longer exists due to the introduction of the GST regime and the transition provisions of the CGST Act, 2017 specifically provide for a refund in cash in such cases. [9.7] It was, therefore, prayed that the respondent No.2 has observed in the impugned order that the petitioner is eligible for rebate only to the extent of FOB value of the goods and not on the CIF value on the ground that during the proceedings before the appellate aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE-I was certified by the jurisdictional Range Officer as true and correct, the rebate sanctioning authority has to sanction the rebate on the basis of that value and an exporter is entitled to rebate of the entire duty of excise paid on a consignment of excisable goods on its export and the same cannot be denied at the time of granting the rebate once duty is collected. It was submitted that the intention of the Government behind granting rebate is to encourage export and to that extent, the duty incidence on export goods is required to be reduced to Nil. It is further clarified by the circular No.278/11/96-CX dated 11th December 1996, circular No.641/32/2002-CX dated 26th June 2002 and circular No.60/1/2006-CX dated 13th January 2006, which are binding on the departmental authorities. [9.9] Reliance was placed on the decision of this Court in the case of Garden Silk Mills Ltd vs. Union of India [2018 (11) GSTL 272], wherein it is observed that irrespective of the fact that the duty was payable on FOB value or CIF value, the Government cannot withhold any amount without the authority of law and the excise duty paid by the petitioner on CIF value ought to be re-credited in the CEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese petitions is the wrong availment of the benefit of concessional rate of duty vide Notification No.59/2008 dated December 07, 2008. Admittedly, the final products were exempted from payment of duty by original Notification No.29/2004-CE dated July 09, 2004 as further amended vide Notification No.59/2008-CE dated December 07, 2008. The fact is not being disputed by the respondents that the petitioner availed Notification No.59/2008 for clearance made to export and thereafter filed various rebate claims. It is, thus, an undisputed fact that the petitioner on final products discharged the duty liability by availing the benefit of Notification No.59/2008 and as has already been noted in the record, it has reversed the amount of Cenvat Credit taken by it on the inputs used for manufacturing of such products. Thus, when the petitioner is not liable to pay duty in light of the absolute exemption granted under Notification No.29/2004 as amended by Notification No.59/2008-CE read with the provision of Section 5A(1A) of the Act and when it has not got any other benefit in this case, other than the export promotion benefits granted under the appropriate provision of the Customs Act and Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aling with the option available to the assessee to exercise as per the payment of duty under Rules 18 and 19 of the Rules, has held as under: "9. Rules 18 and 19 of the Rules read as under: "Rule 18. Rebate of duty. -- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation. - Export includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft. Rule 19. Export without payment of duty.-- (1) Any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner. (2) Any material may be removed without payment of duty from a factory of the producer nor the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners the rebate, as claimed, after calculating interest, as may be applicable in accordance with law, within a period of 12 weeks from the date of receipt of the copy of this order. [16] The contention raised on behalf of the petitioner that in view of the implementation of the GST regime, the refund may be paid in cash is concerned, the Division Bench of this Court, in the case of Thermax Limited (supra), in such circumstances, has held as under: "10. It is thus eminently clear from the aforesaid observations made in the impugned order that the duty, which was paid by the petitioner, which was otherwise not payable on the exported goods and therefore, rebate of such duty was not admissible in terms of Rule 18 of the Central Excise Rules. However, the duty, which was paid by the petitioner is held to be treated as voluntary deposit. As per Section 142(3) of the GST Act, every claim for the refund filed by any person before, on or after the appointed day i.e. 01.07.2017 for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, should be disposed of in accordance with the provisions of existing law and any amount eventually ..... X X X X Extracts X X X X X X X X Extracts X X X X
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