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TMI Blog2013 (4) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 11 of the Central Excise Rules, 2002. Utilising the duty paid LAB so purchased from Indian Oil Corporation Ltd., the applicants manufactured LABSA and exported the same. The Applicants exported the LABSA under Rule 18 under claim of rebate of the excise duty paid on the materials used in the manufacture of final products viz., LAB. The Applicants exported the LABSA towards the fulfilment of their export obligation under the Advance Authorizations obtained by them. In respect of this export quantity of LABSA, excise duty paid on LAB was claimed as rebate under Rule 18(2) of the Rules. The Assistant Commissioner of Central Excise, Amritsar passed impugned orders sanctioning the rebate to the Applicants to be paid in cash through cheque. The department did not accept the findings of the adjudicating authority and filed the appeals before Commissioner (Appeals) on the following grounds :- (i) The respondents have exported the goods under Advance Authorization Scheme. As per the advance authorization scheme, an advance licence is issued to import duty free inputs which are required for further use in the manufacture of export goods and advance authorization ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may direct subordinate authority to apply to the Commissioner (Appeals) for points arising out of the decision or order. The phrase '.....arising out of the order' in Section 35E(2) proves beyond doubt that scope of review under Section 35E(2) is restricted to the order sought to be reviewed and issues contained therein. 4.2 The Commissioner (Appeals) in the impugned orders ought to have appreciated the submissions of the Applicants that when the Applicants have fulfilled all the conditions and procedure for claiming the rebate and the Assistant Commissioner has allowed it under law, the department cannot contend in an appeal filed by them that the applicants were not eligible for rebate, when it is not the case of the department that any condition of Rule 18 read with the notification is violated by the Applicants. It is therefore submitted that since the Applicants have fulfilled all the conditions and limitations as laid down under Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, the rebate cannot be denied to them. 4.3 The provisions of the FTP relating to deemed export benefit stipulate that the benefit of deemed exports will not be available to the supplier i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials used in the manufacture of exported product and this condition of non-availment of rebate of the duty paid on the inputs used in the manufacture of resultant products exported is a pre-condition for availing the benefit of duty free imports on the strength of the advance authorization. This clause only means that for availing the benefit of customs duty free imports on the strength of the authorization, at the time of import, it must be established by the importer that no benefit of input stage rebate has been availed under Rule 19(2) of the Rules. For any such violation, the only recourse available is to deny the benefit of the customs notification at the time of imports and not to deny the rebate claims. Assuming without admitting that clause (v) of the said notification is invocable, it is submitted that for the violation of conditions of the said notification benefit of notification can be denied at the time of import of the goods on the strength of the authorizations but the denial of rebate claim is bad in law. In support of this, the Applicants rely upon the following judgments which are directly related to the issue :- (i) & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls procured inputs, under Advance Authorization Scheme, indigenously from M/s. Indian Oil Corporation, Jawahar Nagar and the clearance against their invoice is in terms of deemed exports. Thus as M/s. IOC, being the supplier of the inputs, has availed the benefit of Deemed Export, the recipient of goods M/s. Omkar Textile Mills are not eligible for any CENVAT Credit or Rebate of such goods. As per the condition of the Advance Authorization Scheme contained in Notification No. 93/2004-Cus., dated 19-9-2004, the facility under Rule 18 (rebate of duty paid on material used in the manufacturing of resultant product) is not available. 6.2 Commissioner (Appeals) in his order dated 17-3-2009 has observed that the notification governing provisions of Advance Authorization is Notification No. 93/2004-Cus., dated 20-9-2004, which clearly provides that the rebate of duty paid on raw materials used in the manufacture of resultant products under Rule 18 of the Central Excise Rules, 2002 is not admissible and has categorically held that the respondents are not eligible for the benefit of rebate of duty paid on materials used in the manufacture of resultant products, for which the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance, (Department of Revenue) No. 93/2004-Custom dated 10th September, 2004, published in the Gazette of India (Extraordinary) vide GSR No. 606(E) the words & figures "under Rule 18" shall be corrected to read as "under Rule 18 (rebate of duty paid on materials used in the manufacture of resultant products" [M.F. (D.R.) Corrigendum F.No. 605/50/2005-DBK] The said corrigendum makes it clear that the restriction imposed in the condition (v) is regarding rebate of duty paid on materials used in the manufacture of resultant product. As such, when goods were exported under Notification No. 93/2004-Cus., the rebate of duty paid on materials used in the manufacture of exported goods become inadmissible due to the embargo put by condition (v) of said notification. 10. Government notes that the applicant is pleading that clause (v) of the said Notification only states that for availing the benefit of customs duty free imports on the strength of the authorization, at the time of import, it must be established by the importer that no benefit of input stage rebate has been availed under Rule 18 of the Central Excise Rules, 2002. For any such violation, the only recourse available is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 93/2004-Cus. 12. Government notes that case laws cited by the applicant pertains to eligibility of Cenvat credit in case of non-compliance of conditions of any Notification. This case pertains to rebate of duty paid on inputs which is governed by Rule 18 of Central Excise Rules, 2002. As such, ratio of judgments cited by applicant is not squarely applicable to this case. Further, Government of India in catena of judgments has held that exporter will be eligible for rebate of duty paid on finished goods, as condition (v) of Notification No. 93/2004-Cus. puts restriction on input stage rebate only. Government notes that in the case of M/s. Shubhada Polymers Products Pvt. Ltd. reported on 2009 (237) E.L.T. 623 (GOI) the said issue was decided by Government vide its Order No. 4-6/2009, dated 16-1-2009 holding that rebate of duty paid on materials used in the manufacture of goods exported in discharge of export obligation under DEEC scheme was not admissible in term of condition No. (v) of Notification No. 43/2002-Cus., dated 19-4-2002 as amended vide corrigendum dated 29-11-2002. The said notification was replaced by Notification No. 93/2004-Cus., dated 10-9-2004 and conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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