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TMI Blog2010 (2) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner, Central Excise, Bangalore-II against orders-in-appeal No. as mentioned in column No. 6 of the table arising out of orders-in-original Nos. as mentioned in column No. 5 of the table below passed by the Commissioner (Appeals), Central Excise, Bangalore. S. No. F.No. Name of the applicant Name of the respondent Order-in- Original No. Date Order-in- appeal No. Date Period Amount of Rebate 1 2 3 4 5 6 7 8 1 198/69/ 08-RA The Commissioner Central Excise, Bangalore-II M/s. TTP Technologies (P) Ltd., Bangalore 100/2007 (R) 27-2-2008 88/2008/CE 7-11-2007 March, April, May, 07 1,44,13,623/- 2 198/155/08-RA The Commissioner Central Excise, Bangalore-II M/s. TTP Technologies (P) Ltd., Bangalore 105/2007 (R) 14-3-2008 159 160/2008/CE 31-7-2008 July, 07 97,70,728/- 3 198/70/ 08-RA The Commissioner Central Excise, Bangalore-II M/s. Big Bags India (P) Ltd., Bangalo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said scheme or the notification issued to operationalise the scheme. When the assessee have not fulfilled any of such conditions/export obligations, they are not entitled to the rebate of the duty paid on the final products, which were exported under the said DFIA scheme. 5.2 The Commissioner of Central Excise (Appeals), Bangalore has erred in holding that the violation of the conditions of the Customs Notification No. 40/2006 is not established. One of the conditions stipulated in Notification No. 40/2006-Cus., dated 1-5-2006 i.e. 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 1-5-2006 and the Commissioner (Appeals) has allowed the appeal of the assessee without appreciating the above factual and legal position. 5.3 The Commissioner of Central Excise (Appeals), Bangalore has held in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such violation are to be taken under the Customs Act, 1962. Even though the assessee were operating under DFIA Scheme which is governed by Notification No. 40/2006-Cus., dated 1-5-2006, the condition No. (v) stipulated therein bars the assessee from claiming rebate on the raw materials under Rule 18 of the Central Excise Rules, 2002, procurement of inputs indigenously without payment of duty under Rule 19 ibid and from availing Cenvat credit under the Cenvat credit Rules, 2004 on the inputs procured indigenously. Accordingly, as the conditions stipulated in the said Notifications are under the Central Excise Rules, 2002/Cenvat credit Rules, 2004, necessary action is to be initiated under the said Rules (i.e. Central Excise Rules, 2002 Cenvat credit Rules, 2004), only, in case of any contravention. 6. The notice under Section 35EE were issued to the respondents who filed their counter replies. Their main arguments are as under : 6.1 On the merits of the revision application, we submit that entire proceeding has been commenced based on misunderstanding of the DFIA Scheme and the Customs Notification No. 40/2006-Cus., which do not prohibit use of inputs on which Cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f In Re : Banswara Syntex Ltd., 2004 (170) E.L.T. 124 (GOI), wherein the Government of India has held that rebate claim had to be considered only with in the scope of erstwhile Rule 12 and Notification issued thereunder and not based on other factors. Hence, we submit that the view of the lower appellate authority is unexceptionable. 6.7 In this context, we also invite reference to C.B.E.C. Circular No. 510/06/2000-CX., dated 3-2-2000, which has directed the lower authorities to consider the admissibility of rebate claims in terms of Rule 18 and notifications issued thereunder and not to take assessment and other factors into account. On this basis also, we submit that the appellate authority has passed the order correctly. Hence, it is not liable to be set aside. 6.8 In this context, we also crave to invite reference to Notification No. 19/2004-C.E. (N.T.), dated 26-9-2004 which governs the procedure for grant of rebate claim. This notification was amended by Notification No. 37/2007-C.E. (N.T.), dated 14-9-2007 by adding clause (h). Under this amendment, rebate claim would not be available to the exporters who claim the benefit of notifications specified under clause (h). We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut by the language used in the notification. This notification does not forbid taking of Cenvat credit on inputs which are not procured against DFIA. Similarly, the Cenvat credit scheme also does not forbid taking of credit of duty paid on inputs when used in exports on DFIA. On the other hand, in terms of Rule 6(5) of the Cenvat credit Rules, 2004, credit of duty take on exports is protected. Hence, this submission of the appellant also merits rejection by the revision authority. 6.12 We also submit that the appellate authority has correctly held that for any violation of the conditions of Customs Notification No. 40/2006-Cus. action has to be initiated under the Customs Act, 1962. Without prejudice to the fact that we have not violated any of the conditions of the said notifications (as no imports have been made under DFIA scrips issued to us in respect of exports relevant for this proceeding), power has not been conferred on the original authority who is a Central Excise Officer, to determine whether or not an export has complied with the conditions of an exemption notification issued under the Customs Act, 1962. Hence we submit that the finding of the appellate authority is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent s case that the applicant has procured the materials against Authorization. 11. Government further observes that Notification No. 40/2006-Cus., dated 1-5-2006 has been amended by Notification No. 17/2009-Cus., dated 19-2-2009 substituting the Condition (v) by following words :- (v) that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within a period specified in the said authorization or with such extended period as may be granted by Regional Authority by exporting resultant products, manufactured in India which are specified in said authorization By said amendment the condition regarding availment of such facilities is deleted. This implies that there is no restriction on the availment of such facilities as were mentioned in original condition (v). 12. It is also observed that in Para 9 of the Circular No. 11/2009-Cus., dated 25-2-2009 C.B.E. C. has directed the field formations to take action to safeguard revenue as suggested in sub-paras a, b, c and d of said para, in respect of past cases of duty free imports for the period 1-5-2006 to 18-2-2009. The said circular also nowhere speaks about any restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the authorization. This is not the department s case that the respondent has procured the material against authorization and taken the Cenvat credit as otherwise also the respondents are entitled to procure the material duty free against the authorization, so there is no question of taking the Cenvat credit. This point has further been clarified by DGFT vide their letter No. 01/94/180/2006-07/AM-07/PC-I, dated 28-7-2006 and 29-9-2006. The relevant portion of the same letter is reproduced below for ready reference :- No Cenvat credit facility shall be available of inputs either imported or procured indigenously against the authorization. Hence in case the inputs used in the export product were on payment of the applicable duty, the exporter is entitled for the Cenvat credit as per the Cenvat credit Rules. The said paragraph is applicable only when the input in the export product were imported or procured against the authorization because the DFIA allows exemption from the applicable duties. As respondent has procured the duty paid inputs without any authorization, same is entitled to take Cenvat credit. 9. The para V of the Customs Notification No. 40/2006-Cus., dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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