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TMI Blog2011 (1) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the applicant Commissioner, Central Excise, Bangalore-III against the order-in-appeal No. 26/2009 dated 26-2-09 passed by the Commissioner (Appeals-II) Central Excise, Bangalore. 2. Brief facts of the case are that the applicant M/s. Aptar B H India Pvt. Ltd. known as M/s. Emsar India Pvt. Ltd., Bangalore are holders of Central Excise Registration No. AAACE5382NXM001 and are engaged in manufacture of Non-Aerosol Spray Pumps falling under the Tariff Heading 8424 89 90 of the first schedule to the Central Excise Tariff Act, 1985. They had filed rebate claim of the duty paid on exported excisable goods under Rule 18 of the Central Excise Rules, 2002. The Dy. Commissioner rejected the rebate of duty of Rs. 5,01,399/- vide order-in-original No. 39/2008 R dated 13-8-08. 2.2 On scrutiny of the shipping bills submitted along with the claim, it was noticed that the export made by the assessee are towards the fulfillment of export obligation under DFIA Scheme. Further, the assessee is availing Cenvat Credit on inputs procured indigenously and while exporting the goods the duty has been paid from cenvat account and not by cash. The provisions of the condition no. (v) of the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition No. (v) is that no cenvat credit shall be availed in respect of the raw materials under the Cenvat Credit Rules, 2004, whereas the assessee have availed cenvat credit of the duty paid on the raw materials used in the manufacture of the final products, which were in turn exported under the DFIA Scheme. Thus, it has been proved by the department the assessee have violated the said condition of Notification No. 40/2006-Cus., dated 1-5-06 and the Commissioner (Appeals) has allowed the appeal of the assessee without appreciating the above factual and legal position. 3.3 The Commissioner of Central Excise (Appeals) has held in his findings that the restriction of availment of cenvat credit under the Cenvat Credit Rules specifically applies only in respect of the raw materials imported/procured indigenously against the Duty Free Import Authorisation. The above findings of the Commissioner (Appeals) appears to be incorrect inasmuch as when the final product is exported under DFIA Scheme, it should be deemed that the raw materials/inputs (used in the manufacture of such exported goods) are also procured under that scheme only. The export of the goods under a particular scheme c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, it is urged that the inputs had not been procured against authorization but have been obtained in the normal course on payment of duty. In view of this, we do not find that the said Notification has been violated. Moreover, there is substance in the contention of the applicants that even if there is an erroneous refund, the same can be recovered only after issue of show cause notice. In the present case, the authority sanctioned the refund had not issued the show cause notice. Moreover, no review under Section 35EE had been done. In view of the above, there is no merit in the impugned orders. The same are set aside. Thus, the appeals are allowed with consequential relief. 4.3 Thus the ration of the above decisions is squarely applicable in the present matter also. The Commissioner of Central Excise, Bangalore-III is bound by the said judgments of the Hon ble Tribunal, and is bound to follow the same, however has without taking into consideration of this decision has filed the present appeal. Hence it is submitted that appeal under Section 35EE of the Central Excise Act, 1944 is contrary to law inasmuch as the Commissioner of Central Excise, Bangalore-III is bound b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said authorization has not been availed. Provided that an Advance Intermediate authorization holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.13(ii) of the Policy. 4.6 From the said paragraph (v) of the said Customs Notification, it is very much evident that it does not prohibit rebate of duty paid on excisable products manufactured and exported out of India, but what is prohibited under the said paragraph (v) is rebate of duty paid on materials used in the manufacture of the resultant product. In the instant case we have exported excisable goods on payment of duty on the resultant product and rebate claim is for the duty of excise paid on the resultant product and not for the rebate of duty paid on the materials used in the manufacture of resultant product. 4.7 The grounds made out at para (iii) is not based on the facts on records. In respect to the ground that when the final product is exported under DFIA Scheme, it should be deemed that the raw materials/input (used in the manufacture of such exported goods) are also procured under that scheme only. Is contrary to the facts on records inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported under DFIA Scheme and have filed the rebate claims on the duty paid on the finished goods. The adjudicating authority had rejected the rebate claims on the grounds that rebate claims were not admissible as applicants violated Condition V of Notification No. 40/2006-Cus., dated 1-5-06. The impugned orders-in-original was set aside by Commissioner (Appeals) and therefore department has filed this revision application on the grounds stated in para 3 above. 8. Government notes that DFIA Scheme is governed by provisions of Foreign Trade Policy (2004-2009) and Customs Notification No. 40/2006-Cus., dated 1-5-06. As per para 4.4.7 of Chapter-4 of the policy No Cenvat Credit facility shall be available of inputs either imported or procured indigenously against the authorization. The para V of the Customs Notification No. 40/2006-Cus., dated 1-5-06 reads as below : That the export obligation as specified in the said authorization (both value and quantity terms) is discharged within the period specified in the said authorization exporting resultant products, manufactured in India which are specified in the said authorization and in respect of which facility under Rule 18 (rebat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule (2) of Rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 in respect of materials imported/procured against the said authorization has not been availed. It means that w.e.f. 19-2-2009, availment of Cenvat credit in respect of materials imported/procured does not debar the assessee from claiming rebate of duty paid on export of finished goods under DFIA Scheme. However, in the meantime, Finance (No. 2) Act, 2009, in the Second Schedule (Section 93), amended Notification No. 40/2006-Customs dated 1-5-06 retrospectively from the date of issue so as to allow the facility of rebate in respect of locally procured materials used in the manufacture of goods exported under the Duty Free Import Authorisation Scheme. The effect of this retrospective legislation is that Notification No. 40/2006-Cus., dated 1-5-06 never prohibited rebate on export of goods under DFIA Scheme, if the Cenvat Credit of duty paid on imported/procured raw material have been availed. In this regard. Para M.9 under the Miscellaneous and Legislative Amendments of Explanatory Notes - Customs of Budget Bulletin 2009, is reproduced below :- Notification No. 40/2006-Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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