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TMI Blog2011 (4) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Tariff Act, 1985. 3. They filed two claims of Rs. 15,65,088/- on 14-11-2006. On scrutiny of claims, some deficiencies were noticed for which a deficiency memo was issued. Claimant vide letter dated 21-11-07 submitted reply as under :- 3.1 These consignments were exported from their Bhiwandi Godown after obtaining permission from Assistant Commissioner, Central Excise, Thane Divn.-II These consignments were originally cleared from the factory of M/s. Elder Pharmaceutical Ltd. and M/s. Life Line Drugs . Intermediates Pvt. Ltd. under Bond and were seized by DRI officials during investigation. On issue of Show Cause Notice, the claimant approached the Hon ble Settlement Commission and paid the excise duty on these consignments. Therefore, they had not submitted copies of excise invoice. They enclosed the photocopies of Excise Invoices of the said consignments along with the said letter dated 21-11-2007. 3.2 The duplicate copies of TR-6 Challans were submitted to DRI officials as a proof of payment of duty. Therefore, they had submitted triplicate copies of the challans. 3.3 Since the goods were originally cleared under Bond i.e. without payment of duty and the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chemical. It will be evident from the statement of Shri Kanakia that there was no involvement of the applicant in the said attempt. Shri Kanakia has done the same in order to earn profit. The order does not anywhere dispute the duty paying character of the exported goods. There is no dispute on the fact that the appropriate amount of duty has been paid on the goods which are exported. The notification No. 19/2004 issued under Rule 18 of the Central Excise Rules nowhere provides for rejection of refund claim when the duty is paid subsequent to detection of any fraud by DRI. It is submitted that in absence of such a provision, the rebate claim cannot be rejected even when duty is paid subsequently. 5.2 The order of Assistant Commissioner (Rebate), Central Excise, nowhere disputes export of goods and payment of duty. The goods before export were stored in Bhiwandi godown. The applicants have obtained permission from Assistant Commissioner of Central Excise, Kalyan, for diverting the goods for export. The goods were exported under the supervision of Superintendent of Central Excise, Kalyan, he has signed on the back of the ARE-1, copy attached with the rebate claim and also certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Central Excise, Kalyan. The ARE-1 prominently indicates that the goods have been exported under rebate of duty. The Superintendent of Central Excise, before export has verified the particulars of goods and the particulars given in the application and the ARE-1 was endorsed. The Excise Officer deputed for verification of goods for export was satisfied about the identity of goods, its duty paying character and all other particulars and accordingly certified the same. The Customs Officer has endorsed the ARE-1 to substantiate that the goods contained in ARE-1 have been exported. In view of this it is submitted that as per the Board s circular, the condition that the goods should be exported directly from the factory or warehouse stands relaxed. Therefore, the rebate of duty shall be granted. 5.4 The applicants have applied for extension of period as the export was to be made beyond the period of six months. Copy of application and the reply received from Assistant Commissioner (Bond), Central Excise is attached to substantiate the same. It was informed that the permission is not necessary. It may be noted that the Assistant Commissioner, Kal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the subject removals, along with interest and penalty on the mastermind co-applicant (Shri Nikunj Kirti Kanaria). 6.3 Pursuant to approaching Settlement Commission and the case booked by the DRI under show cause notice DRI/BZU/F/01/2005 dated 27th September, 2005, inter alia, following amounts were paid on account of the manufacturers - (a) M/s. Elder Pharmaceuticals Ltd. - Rs. 8,06,208/- (b) M/s. Lifeline Drugs Intermediates Pvt. Ltd. - Rs. 22,76,640/-. 6.4 Subsequently on provisional release some goods were exported and the merchant-exporter M/s. FDC Ltd. claimed rebate of Rs. 8,06,208/- and Rs. 7,58,880/-. 6.5 The subject consignment were originally procured by the claimant under bond without payment of duty for export in the month of March, 2005. It is admitted by the claimant that the bulk drugs - Flaconazole and Niconazole Nitrate were diverted to a warehouse in Bhiwandi, substituted with talc powder and presented to customs for export. The fraud was detected by the DRI and on testing it was conclusively proved that talc powder was misdeclared as the bulk drugs, for misuse of export incentive schemes. Subsequent to issuance of SCN, the claimant approa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice No. 35 dated 24-3-2005. However after settlement of the case by the Hon ble Settlement Commissioner, the said goods were exported under ARE-1, bearing Nos. 01 and 02, both dated 29-8-2006 and shipped/sailed on 5-9-2006. Therefore, from the date of clearance from the factory premises i.e. 23-3-2005, the period of six months lapse on 23-9-2005. Therefore, there is a delay of around one and half years in export. However, neither they have applied for extension of time to export the goods cleared under Bond nor they have applied for extension to export the goods after payment of duty within stipulated period. Therefore, the claimant had failed to fulfil the condition 2(b) of the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 as amended. Hence they are not eligible for rebate claims. Further, no disclaimer has been submitted by the claimant from the manufacturers. 6.8 Regarding Board s Circular 294/10/97-CX., dated 30-1-1997, for relaxation to condition of direct export from factory of manufacturer it is submitted in para 8.1 lays down that An Exporter (including a manufacturer-exporter), desiring to export duty paid excisable goods (capable of being clearly identified) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During export of these consignments of Fluconazole and Miconazole Nitrate, DRI officials detained these consignments at Airport and took samples and sent them for testing at Central Drug Testing Laboratory, Mumbai. The test report indicated that these goods were not talc powder. On further investigations by DRI officials, Fluconazole 3 MTs and Moconazole 2.5 MTs were traced in the godown at Manoj Warehouse, Bhiwandi. DRI seized these consignments for further investigation in the month of June, 2005. After issue of SCN by DRI, the applicant approached the Hon ble Settlement Commission who ordered the provisional release of goods vide Admission Order dated 18-4-2006 and finally decided the case on 22-8-2006. The applicant paid the admitted duty liability on these goods and exported the same under claim of rebate vide 2 ARE-ls under supervision of Central Excise Officers on 29-8-2006. They filed rebate claims and submitted the requisite documents along with TR-6 challan dated 23-12-2005 in support of evidence of payment of duty. The commercial invoice was issued by them on the goods were cleared from merchant-exporters end. The findings of adjudicating authority on export of goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 18 of Central Excise Rules, 2002. In this regard, Government observes that duty paid subsequent to clearance of goods from factory is not denied by department. The duty liability accepted on these goods before Settlement Commission paid through TR-6 Challan. The Assistant Commissioner, Central Excise (Tech.), Mumbai-V vide his letter F.No. VT/BOND/M-V/223/Ext/4/060-07, dated 17-8-06 had informed that there was no need to grant permission to export the consignment as the duty has already been discharged. As regards following correct procedure, applicant was granted permission as a special case to export these goods vide ACCE Kalyan-I Division letter F.No. Cx/Misc/Permission/FDC/KI/T-II/06/4371, dated 2-8-06 subject to the condition that they will follow all procedures, conditions and safeguards as laid down in Board Circular No. 18/92-Cx-6, dated 18-12-92 and No. 294/10/97-CEX, dated 30-1-97 to the satisfaction of jurisdictional range superintendent on whose goods such goods are stored. At the same time Superintendent Central Excise was also directed to ensure that goods should be in original packed condition and appropriate duty have been discharged on the goods under export ..... X X X X Extracts X X X X X X X X Extracts X X X X
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