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TMI Blog2010 (2) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... Champaneri, learned Assistant Solicitor General, waives service of rule in both these petitions. 2. Since the common issue is involved and since both the petitions are heard together the same are being disposed of by this common judgment. 3. Special Civil Application No. 12638 of 2008 is filed by Welspun Gujarat Stahl Rohren Ltd., and its authorised person praying for declaration that Section-87 of the Finance Act, 2008 read with the Fifth Schedule thereto is ultra virus Articles 14, 19(1)(g) and 265 of the Constitution of India to the extent the same provides for cut off date of 7-12-2006. The petitioners have also prayed for the direction to the respondents to forthwith allow and/or grant the rebate in respect of the exports made by the Company as detailed in Annexure-A to the petition. 4. By virtue of an amendment granted by this Court on 24-12-2009 one more prayer was made by the petitioner praying for quashing and setting aside the Circular dated 8-12-2006 and 3-4-2007 (Annexure-F and Annexure-G respectively to the petition). 5. Special Civil Application No. 12639 of 2008 is filed by Man Industries (India) Ltd., Anr. making more or less similar prayers. 6. The fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their prayer for the direction to grant rebate in respect of exports made by them are concerned, Mr. Trivedi has submitted that the right to claim rebate is contained in Rule-18 of the said Rules, subject to the conditions mentioned therein including the condition that the said goods exported are duty paid. The grant of rebate under Rule-18 is governed by Notification No. 19/2004- C.E. (N.T.), dated 6-9-2004 of which all the terms and conditions are satisfied by the Company. Upon exports of the said goods, vested right is accrued for grant of the rebate. Accordingly, the Company is eligible for rebate in respect of the exports of the said goods under Rule-18 as is stood at the relevant time of exports thereof. The denial of rebate is, therefore, illegal and bad in law and contrary to the provisions of Rule-18 of the Rules read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. 9. Mr. Trivedi further submitted that Rule-18 of the Central Excise Rules was amended on 17-9-2007 by the amending Notification. The amending Notification was issued by the Central Government in exercise of powers vested under Section-37 of the Central Excise Act. There is no power under Section-37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , submitted that the denial of rebate is arbitrary, unreasonable, irrational and violative of Articles 14, 19(1)(g) and 265 of the Constitution of India. 12. Mr. Trivedi has alternatively submitted that the cut off date in terms of Section-87 read with Schedule-V to the Finance Act, 2008 is artificial. There is no significance of December, 2006 except for the fact that the respondent No. 3 issued the Circular on 8-12-2006. This is more so when the said Circular dated 8-12-2006 has no relation whatsoever to the provisions of Rule-18. As long as provisions of Rule-18 continue to be the same, although before and after 8-12-2006, all goods which have been removed under the area based Notification are not justified and have no nexus with the object and purpose of the amendment to Rule-18 on 17-9-2007. He has, therefore, submitted that there is no justification in denying the rebate claim of the petitioners. 13. Mr. Trivedi further submitted that it is settled law that what cannot be done directly, cannot be done indirectly. By providing for an artificial cut off date of 7-12-2006, retrospective effect is sought to be given to the amendment to Rule-18 vide Notification No. 37/2007-C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Solicitor General, appearing for the respondents, on the other hand has submitted that the petitioners have already availed cash refund under a Notification No. 39 of huge amount. The petitioners have filed this petition for availing of the double benefit by way of rebate under Rule-18 in respect of the refund already availed. He has, therefore, submitted that this petition cannot be considered to be bona fide litigation and hence the same deserves to be dismissed. He has further submitted that Rule-18 of the Central Excise Rule, 2002 provides for grant of rebate of duty paid on exported goods as per procedure and terms and conditions prescribed under the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. He has further submitted that the Notification No. 39/2001-C.E., dated 31-7-2001 issued under the provisions of Section 5A(1) of the Central Excise Act, 1944 provides for the exemptions from excise duty only to the extent it is in excess of the amount paid out to Cenvat Credit. The said exemption, Notification No. 39/2001-C.E. has been operationalized by way of paying the full amount of duty at the first instance and, thereafter, granting of refund of duty paid in cash. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amendment in the provisions of Rule-18 of Central Excise Rules, 2002 is not by an Executive Act, but by the Legislative Act of the Parliament and hence the application and/or operation of the provisions of Rule-18 of Central Excise Rules, 2002 has been restricted only upto a period enumerated in Col. No. 3 of Sixth Schedule. 18. Mr. Champaneri further submitted that the rebate of duty paid on excisable goods cleared from a factory for export shall be admissible for that portion of duty for which refund has been granted in terms of the Notification No. 39/2001-C.E., dated 31-7-2001 by amending the Rule-18 of the Central Excise Rule, 2002 vide Section-88 of the Finance Act, 2008. The period of effect of amendment in the said Rules is from 1-3-2002 to 7-12-2006. He has, therefore, submitted that the petitioners have availed the exemption of duty paid from cash/PLA under a Notification No. 39/2001-C.E., dated 31-7-2001 and, therefore, the subsequent and/or the double refund of the same amount cannot be granted as a rebate of duty. He has further submitted that Cenvat credit and the rebate and duty has been provided respectively under the provisions of Cenvat Credit Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ialization in the earthquake affected areas, the petitioner No. 1 Company being an unit located in Kutch District is entitled to the benefit of this Notification. Once having availed the benefit of refund under this notification the petitioners claimed rebate of the duty paid on export of goods from the factory premises. This Court has to now consider whether this would amount to double benefit by way of claiming rebate under Rule-18 of Central Excise Rules, 2002. Rule-18 reads as under :- "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." 21. The grant of rebate under Rule-18 was governed by Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and the petitioner No. 1 Company, as a matter of fact was getting rebate upto 7-12-2006 of duty paid on all exports made. However, a deviation was made for the first time on 8-12-2006. The Central Board of Excise and Customs issued a Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be imposed." 23. To overcome the above difficulty, the Government of India issued Notification No. 37/2007-C.E. (N.T.), dated 17-9-2007, which reads as under :- "In exercise of the powers conferred by Rule-18 of the Central Excise Rules, 2002, the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue No. 19/2004-C.E. (N.T.), dated the 6th September, 2004 published in the gazette of India, Part-II, Section-3, Sub-Section (i) Extraordinary, No. 570(E), dated the 6th September, 2004. In the said notification, in paragraph-2, after clause (g, the following clause, shall be inserted, namely :- (h) that in case of export of goods which are manufactured by a manufacturer availing the notifications of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/99-Central Excise, dated in 8th July, 1999 (G.S.R. 509(E), dated the 8th July, 1999) or No. 33/99-Central Excise, dated the 8th July, 1999 (G.S.R. 509(E) dated the 8th July, 1999) or No. 39/2001-Central Excise, dated the 31st July, 2001 (G.S.R. 565(E) dated the 31st July, 2001) or notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the following proviso shall be inserted, namely :- Provided that the rebate of duty paid on excisable goods cleared from factory for export shall also be admissible for that portion of duty paid for which the refund has been granted in terms of the notifications of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 508(E), dated the 8th July, 1999 132/99-Central Excise, dated the 8th July, 1999) or number G.S.R. 509(E) dated 509(E) dated the 8th July, 1999 133/99-Central Excise, dated the 8th July, 1999), number G.S.R. 565(E) dated the 31st July, 2001 139/2001-Central Excise, dated the 31st July, 2001), or notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue) number G.S.R 764(E) dated the 14th November, 2002 (56/2002-Central Excise, dated the 14th November, 2002), number G.S.R. 765(E) dated the 14th November, 2002 (57/2002- Central Excise, dated in the 14th November, 2002), or notification of the government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 513 (E), dated the 25th June, 2003 (56/2003-Central Excise, dated the 25th June, 2003), number ..... 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