2013 (5) TMI 378 - HC - Central Excise

Benefit of rebate under Notification No.19/2004 dated 6.9.2004 against export - Area bases Exemption - unit situated in Kutch area availing the benefit of Exemption Notification No.39/2001 dated 31.7.2001 - Held that - Claim for rebate under Exemption Notification No.19/2004 would accrue upon actual export of goods. Mere clearance of the goods for export from the factory premises would not be sufficient. Fulfillment of such a condition is necessary but not sufficient for exporter to claim rebate. Therefore, on all the exports made by the petitioner after 17.9.2007, the petitioner had no accrued right to claim rebate on the basis of unamended notification on the basis of clearance of goods from the factory. Mere fact that such goods were cleared from the factory premises for export before such date, would not give rise to an indefeasible claim of rebate. When by amendment in the Exemption Notification No.19/2004 an additional clause (h) to paragraph 2 was added introducing an additional condition that such amended notification would apply to all exports made after 17.9.2007 stating that in case of export of goods which are manufactured by a manufacturer availing the notifications of the Government of India No.39/99-Central Excise, dated the 31st July, 2001 and some more as specified the rebate shall not be admissible under this notification. It is undisputed that the petitioner is covered by such condition since the petitioner claims benefit of Exemption Notification No.39 of 2001. In that view of the matter, the Appellate as well as Revisional Authorities committed no error. Order beyond the scope of the show cause notice - Held that - It is true that reference to this objection was in relation to the clarification issued by CBEC in this respect. However, the petitioner itself was acutely conscious of the amendment in the Notification No.19 of 2004. It was precisely for this reason that at the very outset, in the reply to the show cause notice itself, the petitioner raised the contention that such amendment would not apply to the exports, which may have been made after 17.9.2007 but clearance of which was made from the factory for export before such date. Thus the issue whether such amendment would apply in above set of facts was very much at large before the Adjudicating Authority. It is not even the case of the petitioner that any disputed facts are involved for examining this legal issue. Notifications are in the nature of delegated legislation. The question, therefore, is Rule amended or unamended, should apply to admitted set of facts, is pure question of law. Had the petitioner been denied the fair opportunity to raise any contention factually or legally, the grievance of breach of natural justice would have been valid. - Decided against the assessee.

Issues Involved:

1. Challenge to the Order-in-Appeal dated 27.4.2011 and the order dated 18.5.2012.
2. Applicability of the amendment Notification No.37/2007 dated 17.9.2007 to exports made after this date.
3. Entitlement to rebate claims under Exemption Notification No.19/2004.
4. Validity of the CBEC circular dated 8.12.2006.
5. Scope of the show cause notice and whether authorities travelled beyond it.

Issue-wise Detailed Analysis:

1. Challenge to the Order-in-Appeal dated 27.4.2011 and the order dated 18.5.2012:

The petitioner challenged the Order-in-Appeal dated 27.4.2011 by the Appellate Commissioner and the order dated 18.5.2012 by the Government of India as the Revisional Authority. The Appellate Commissioner partly allowed the Department's appeal, holding that rebate claims were eligible for goods exported before 17.9.2007 but rejected claims for exports after this date. The Revisional Authority upheld this decision, stating that the rebate claims were inadmissible for exports made after the amendment on 17.9.2007.

2. Applicability of the amendment Notification No.37/2007 dated 17.9.2007 to exports made after this date:

The central controversy was whether the amendment Notification No.37/2007, which added condition (h) to Exemption Notification No.19/2004, applied to exports made after 17.9.2007, even though the goods were cleared from the factory before this date. The court held that the rebate claim accrues upon actual export of goods, and the amended notification would apply to all exports made after 17.9.2007, regardless of when the goods were cleared from the factory.

3. Entitlement to rebate claims under Exemption Notification No.19/2004:

The petitioner claimed benefits under Exemption Notification No.19/2004, which grants rebate of excise duty on exported goods, subject to certain conditions. The court noted that the rebate claim arises upon the export of goods and not merely upon clearance from the factory. The petitioner did not fulfill the newly added condition (h) in paragraph 2 of the notification, which made the rebate inadmissible for goods manufactured by a manufacturer availing specified area-based exemptions, including the Kutch area Exemption Notification No.39/2001.

4. Validity of the CBEC circular dated 8.12.2006:

The petitioner contested the validity of the CBEC circular dated 8.12.2006, which stated that goods availing Kutch Area Exemption Notification would not be entitled to rebate as they cannot be considered duty-paid. The court noted that this circular had been struck down in a previous judgment, upheld by the Supreme Court. Consequently, the Adjudicating Authority initially granted the rebate but later reversed this decision following the amendment to Notification No.19/2004.

5. Scope of the show cause notice and whether authorities travelled beyond it:

The petitioner argued that the authorities relied on the amendment in Notification No.19/2004, which was not part of the original show cause notice. The court found that the show cause notice did encompass the issue of rebate eligibility under the Exemption Notification No.19/2004. The petitioner was aware of the amendment and had raised contentions regarding its applicability. Thus, the authorities did not travel beyond the scope of the show cause notice.

Conclusion:

The court dismissed the petition, holding that the rebate claims were rightly rejected for exports made after 17.9.2007 due to the applicability of the amended notification. The court found no merit in the petitioner's arguments and upheld the decisions of the Appellate and Revisional Authorities. The petition was dismissed, and the notice was discharged.

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