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TMI Blog2010 (4) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... Evershine Polyplast Pvt. Ltd., Rajkot against Order-in-Appeal No. 191 to 210/2007/Commr(A)/Raj, dated 30-8-07 passed by the Commissioner (Appeals) Central Excise Rajkot-I. 2. Brief facts of the case are that M/s. Evershine Polyplast Pvt. Ltd., Rajkot (hereinafter referred to as the applicant) is engaged in the manufacture of excisable goods viz. HDPE rope (Plastic Rope) P.P. Baler Twines, etc. falling under First Schedule to the Central Excise Tariff Act, 1985. 2.2 Facts of these cases are that the applicant filed different rebate claims under Rule 18 of the Central Excise Rules, 2002 with the jurisdictional Assistant Commissioner for export of the goods viz PP Baler Twines which were sanctioned by the Lower Authority vide his rebate sanction orders (as mentioned in column no. 06 of the table given below : TABLE Sl. No. Appeal File No. Order No. & Date confirming demand Amount of demand confirmed as erroneous cash rebate (Rs.) Amount of Penalty imposed (Rs.) Rebate claim sanctioned earlier vide order No. & D (1) (2) (3) (4) (5) (6) 01 V2/143/RAJ/2007 R/744/2007 30-5-07 1,19,731 10.000 R/129/2006 28-4-06 02 V2/144/RAJ/2007 R/759/2007 31-5-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of Section 11D of the Central Excise Act, 1944 is applicable in these cases as the excess collection and deposition was earned back by way of rebate inasmuch as though the applicant had deposited/paid whole of the 16% duty collected from their buyer to the credit of Government against Central Excise Duty payable, but the same was claimed as rebate subsequently. Therefore, the excess payment of rebate in excess of 8% is recoverable from them under Section 11A read with Section 11D of the Central Excise Act, 1944. (iii) Since the applicant knowingly and willfully paid the amount in excess of duty required to be paid for the goods to be exported under claim of rebate in order to encash the excess credit available with them, they are liable for penal action under Rule 27 of the Central Excise Rules, 2002. 2.4 The Show Cause Notices were adjudicated by the Lower Authority after giving opportunity to the applicants, vide orders (as mentioned in column no. 3 of the above table) wherein he confirmed the demand of erroneously granted cash rebate in excess of 8% under Section 11A read with provisions of Section 11D of the Central Excise Act, 1944 and imposed penalty under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t debarred from getting the rebate of the said amount. The department has thus rightly sanctioned the refund claim. Thus the Commissioner (Appeals) erred in not considering this aspect. (B) Board Circular has Clarified the Issue The Board has also clarified this situation vide the Board's Circular No. 510/06/2000, dated 3-2-2000. While guiding in the similar issue, the Board has clarified that the rebate sanctioning authority should not examine the correctness of assessment but should examine only the admissibility of rebate of the duty paid on the export goods covered by a claim. Further, the Board has also clarified that, since there is no need to reducing rebate, the question of taking of re-credit in RG23 A Pt. II or RG 23 C Pt. II do not arise. Thus it is clarified that, the rebate shall be granted of duty paid and not duty payable. (C) Precedent are in Favour of the Applicant (i) We respectfully pray your honour to consider the following case, which is the direct judgment in issue : Bharat Chemicals v. CCE, Thane reported in 2004 (170) E.L.T. 568 (T-Mum.) wherein the Bench has held that, "4. We are inclined to accept the applicant's claim. Rule 12 of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. The applicant has only paid from the Cenvat account, which is accumulated credit. (a) The applicant could have followed the procedure appended to Notification 43/2001-C.E. (N.T.) and procure the goods without payment of duty. In such circumstances the applicant need not have the burden of duty paid on raw material. (b) The applicant could have followed the procedure appended to Notification 21/2004-C.E. (N.T.) and get the rebate of full duty paid on the raw material consumed in export goods. In these circumstances also the applicant need have burden of duty paid on raw material. (c) The applicant could have followed the procedure of Rule (5) of Central Excise Rules, 2004, and could have exported the goods under UT-1/Bond and could get the rebate of accumulated credit. In view of above situations, the applicant need not have the burden of duty paid on raw material. Therefore, for not following the procedure and by paying excess duty is not offence at all. There was no mala fide of the applicant, nor there is any revenue loss for the department. Therefore the alleged portion of the order-in-original is bad in law and liable to be discarded. (iv) The Department shall have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed the demands vide order-in-original as mentioned in column no. 3 of the table which was upheld by Commissioner (Appeal). Applicant has contended that as per CBEC Circular No. 423/56/98-CX., dated 22-9-98 (F.No. 387/78/98-JC) issue of show cause notice for recovery of erroneously refund should follow the review of the order sanctioning refund. They have further relied upon the Hon'ble CESTAT Final Order No. 930/06 dated 19-5-06 in the case of Voltas Ltd. v CCE, Hyderabad reported as 2006 (202) E.L.T. 355 (T.-Bang.) wherein it has held that "Demand- erroneous refund-order of Assistant Commissioner sanctioning refund not challenged at all by the Revenue- Show cause notice issued for recovery of erroneous refund not sustainable- Board Circular No. 324/56/98-CX., dt. 22-9-98 - Section 11A of Central Excise Act, 1944. Against the contention of the applicant Commissioner (Appeal) while disagreeing with said contention relied upon Bombay High Court Judgment in the case of M/s. Indian Dye Stuff Ind. Ltd. v. UOI [2003 (161) E.L.T. 12 (Bom.) which was upheld by Hon'ble Supreme Court. The relevant para of Commissioner (Appeals)'s order is as under :- "It is relevant to cite the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal provisions. The "Precedents" are to be judiciously applied in such a way that the proceedings should not be directed towards and in support of any unconstitutional/invalid order. The guiding factor in such situations should be as per "Hon'ble Supreme Court in para 10 of the judgment in the case of Escorts Ltd. v. CCE, Delhi-II [2004 (173) E.L.T. 113 (S.C.)] observed, inter alia, that one additional or different fact may make a word of difference between conclusion of two cases, and in para 11 further inferred as following :- "11. The following words of Lord Denning in the matter of applying precedents have to become locus classiance :- 'Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect……………'" 10. In view of above, Government, therefore, finally observes in this case that even if the appeal proceedings are initiated under Section 35E(2), it cannot lead to recovery unless the recovery proceedings are initiated. Therefore, recovery proceedings were rightly initiated under Section 11A of Central Excise Act, 1944 as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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