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TMI Blog2013 (7) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... rawing wire from wire rods does not amount to manufacture. Thereby, their earlier Circular No. 570/7/2001, dated 16-2-2001 clarifying that the said process amounted to manufacture was withdrawn by the Board. However, the applicant made a representation to the adjudicating authority and submitted that the Circular dated 29-5-2003 shall not be applicable in their case and acclaimed that their process amounted to manufacture. Therefore, a show cause notice was issued to the applicant which was decided by the adjudicating authority vide the impugned order holding that with effect from 29-5-2003, drawing of SS wire from SS wire rods did not amount to manufacture. However, the applicant continued to avail Cenvat credit and utilized the same for payment of duty when the final products were cleared for export and claimed rebate thereof under Rule 18 of Central Excise Rules, 2002. 2.3 The adjudicating authority had sanctioned 14 such rebate claims vide order dated 14-8-2003 against which the department has preferred appeal. Thereafter, 29 similar rebate claims were rejected by original authority against which the applicant filed the appeals before Commissioner (Appeals). 2.4 The applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed orders-in-appeal, the applicant has filed these revision applications under Section 35EE of Central Excise Act, 1944 before Central Government on the following grounds :- 3.1 There is an inherent contradiction in the order passed by the Commissioner (Appeals) because having held at para 14 of the order that the applicant shall be eligible for rebate of duty debited where the goods were cleared from the factory for export on payment of duty, the Commissioner (Appeals) has held in the subsequent para 15 of the same order that the amount of rebate claims were to be sanctioned to the extent as worked out in terms of Rule 16(2) of the Rules, that is to say, the rebate claims for the amount equal to the Cenvat credit taken on wire rods alone would be allowed and not the duty debited while clearing the goods for export as held at para 14 of the order. The order and direction in para 15 are contrary to the amendment of Rule 16 made by the Parliament by virtue of the Amendment Act, 2006 and also contrary to the judgment and directions of the Hon'ble Gujarat High Court in the applicant's own petitions. Therefore, the direction and order to sanction rebate claims only to the extent as wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant's rebate claims. The impugned direction and order of the Commissioner (Appeals) defeat the very purpose and objective of the said Amendment Act of 2006 and also the spirit of the interim direction issued by the Hon'ble Gujarat High Court in the applicant's own case, and therefore this direction and order for restricting the rebate claim under Rule 16(2) of the said Rules to the extent that rebate could be worked out equivalent to the Cenvat credit taken on wire rods is wholly illegal and without jurisdiction. 3.2 The direction and order of the Commissioner (Appeals) for allowing rebate claim to the extent as worked out in Rule 16(2) of the Central Excise Rules, 2002 is even otherwise illegal and unauthorized because rebate under Rule 18 of the said Rules has to be allowed for the duty paid on the goods exported. Rule 18 as well as the Notification issued thereunder specifically provide for granting rebate of 'duty paid' and thus the actual amount paid/debited as duty on the exported goods has to be allowed as rebate without any restrictions or reduction in amount. It is not within the jurisdiction of the rebate sanctioning authority to decide what was the amount of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment notes that Commissioner (Appeals) has held the rebate claims to be admissible where goods were cleared from the factory for export on payment of duty in view of Hon'ble High Court of Gujarat order dated 19-4-2011 in SCA No. 18992 of 2005 and retrospective amendment in Rule 16 of Central Excise Rules, 2002 vide Section 39(1) of the Taxation Laws (Amendment Act, 2006. But at the same, Commissioner (Appeals) held that amount of rebate claims are to be sanctioned to the extent as worked out in terms of Rule 16(2) of Central Excise Rules, 2002. The applicant being aggrieved of this portion of order-in-appeal restricting the rebate claim in terms of Rule 16(2) ibid has filed these revision applications on the ground stated in para 3 above. 7. The applicant company is engaged in the manufacture of S.S. Wires from S.S. Hot rolled Black wire rods. C.B.E. & C. has issued Circular No. 720/36/2003, dated 29-5-2003 clarifying that process of drawing wire from wire rods did not amount to manufacture. The said circular was issued in view of Supreme Court judgment in the case of Technoweld Industries - 2003 (155) E.L.T. 209 (S.C.) holding that process of drawing wire from wire rod did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of amendment (1) (2) (3) Rule 16 of the Central Excise Rules, 2002 as published vide notification No. G.S.R. 143(E), dated the 1st March, 2002. In the Central Excise Rules, 2002, in rule 16, after sub-rule (3), the following provisos shall be inserted, namely :- 'Provided that for the proposes of this rule, "assessee" shall include wire drawing units, which has cleared the goods on payment of an amount equal to the duty at the rate applicable to drawn wire on the date of removal and on the value determined under relevant provisions of the Act and the rules made thereunder : Provided further that the amount paid under the first proviso shall be allowed as CENVAT credit as if it was duty paid by the assessee who removes the goods'. 29th day of May, 2003 to 8th day of July, 2004 (both days inclusive 8.2 Government notes that C.B.E. & C. vide its Circular F.No. 201/51/2004-CX-6, dated 26-7-2006 has issued clarification with respect to abovesaid retrospective amendment in Rule 16 of Central Excise Rules, 2002. The extract of para 4.1. to 4.4 of said circular containing detailed clarification, is as under :- "4.1 Rule 16 of the Central Excise Rules, 2002 has been retros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilize the same for payment of duty on drawn wire for the period of amendment. The sum paid by the wire drawing unit in such cases will be treated as duty and shall be allowed as credit to the buyer of drawn wire, in terms of the amendment. This amendment would not create any additional liability on any wire drawing unit which did not pay duty on drawn wire during the period of amendment." 8.3 The para 4.4. of said circular stipulates that retrospective amendment made in Rule 16 ibid for the period 29-5-2003 to 8-7-2004 was aimed at facilitating wire drawing units for regularizing availment of Cenvat credits at two stages (i) at the input stage on wire rods (ii) second by the downstream user of drawn wire and the amount paid as Central Excise duty on clearance of drawn wire. C.B.E. & C. has further clarified that wire drawing units which had paid a sum equal to duty leviable on drawn wire would be eligible to avail the credit of duty paid on inputs and utilize the same for payment of duty on drawn wire for the period of amendment, and at the same time the sum paid by wire drawing unit will be treated as duty and shall be allowed as credit to the buyer of drawn wire in terms of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Not manufacture in view of Technoweld Industries judgment [2003 (155) E.L.T. 209 (S.C.)] - Period of dispute August, 2003 to 8-7-2004 - Ferrous-based resistance wires falling under Chapter 72 of Central Excise Tariff, on which credit was taken, are covered by Notification No. 28/2010-C.E. issued under Section 5B of Central Excise Act, 1944 - Other wires in the case, being copper wire or copper nickel allow wire of Chapter 74 ibid are not covered. However, Tribunal considered the retrospective amendment made earlier to Rule 16 of Central Excise Rules, 2002 by Section 39 of Taxation Laws (Amendment) Act, 2006, for the period 25-5-2006 to 8-7-2004, whereby provisos were added to sub-rule (3) of Rule 16 ibid, which were clarified in C.B.E. & C. Circular No. 831/8/2006-C.E., dated 26-7-2006. The implication thereof is that the units making wire from wire rod were to be treated as the assessee who had received the goods for being "re-made, refined, re-conditioned or for any other reason" under Rule 16(1) and thus, he could take Cenvat Credit of the duty paid on wire rods, and the amount paid as duty on the clearance of wires was to be treated as Central Excise duty which was available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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