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TMI Blog2013 (7) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 3(5) of Cenvat Credit Rules, 2004 - Rebate claim is admissible to the applicant under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 – Decided in favor of Assessee. - F. Nos. 195/57-86/2011-RA - 479-508/2012-CX - Dated:- 27-4-2012 - Shri D.P. Singh, J. REPRESENTED BY : S/Shri K. Chander Rao, AGM and P. Dwarakanath, Consultant, for the Assessee. None, for the Department. [Order]. These revision applications are filed by the applicant M/s. Divi s Laboratories Ltd., Nalgonda, Andhra Pradesh against the Orders-in-Appeal No. 18-47/2010 (H-III)(D)(C.E.), dated 29-10-2010 passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals-III), Hyderabad with respect to Orders-in-Original Nos. 465/468/470-472/474-475/477/REB/2009 and 152-173/REB/2010 passed by the Deputy Commissioner of Customs, Central Excise and Service Tax, Nalgonda Division, Hyderabad-III, Commissionerate. 2. Brief facts of the case are that the applicants are manufacturers of Bulk Drugs and Drug intermediates. They have filed rebate claims for the amounts paid by them on clearance of input as such to SEZ. After due pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 before Central Government on the following grounds : 4.1 The Commissioner (Appeals) has allowed the appeals of the department on two grounds and they are : (i) The duty paid by the applicant by reversing the Cenvat Credit in terms of sub-rule (5) of Rule 5 of the Cenvat Credit Rules, 2004. (ii) As per the Notification, the goods ought to have been manufactured in the factory of the applicant. The contention of the Commissioner (Appeals) at para 8(i) of the impugned order that : Although such Cenvat credit can be utilized for removal of the inputs as such, and the same can be further taken as a Cenvat credit by an eligible DTA unit, in terms of proviso to sub-rule (5b) of Rule 3 of CCR, such Cenvat credit amount reversed on the inputs removed as such, cannot be treated as the duty Therefore, the subject inputs cleared as such by the respondents cannot be treated as excisable goods cleared on payment of duty . Hence, their claim under Rule 18 of Central Excise Rules, in respect of the subject inputs cleared as such, was not admissible. 4.2 The contention of the Commissioner (Appeals) is incorrect and contrary to the provisions of law. The provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A part-II account by virtue of Rule 57F(4)(iii), the manufacturer will be entitled for rebate under Rule 12(1)(a) of the Central Excise Rules. He is, however, put to disadvantage if he opts for export under bond procedure. The exports under claim of rebate and export under bond should be at parity, since, intention of both the procedures are to make duty incidence nil . It is also an established principle that rules should be interpreted in a manner which do not render them redundant 5. Accordingly, it is clarified that the Modvat Credit in RG 23A Part-II account against the export of inputs as such under bond can be utilized in the same manner as it is provided for a final product under proviso to Rule 57F(4).Obviously, it follows from this that such inputs should be allowed to be exported under bond without any reversal of the credit From the above narrations, it is clearly evident that any supplies made to an SEZ unit or SEZ developer needs to be understood as exports . In this regard, the applicant would like to draw the attention to Circular No. 6/2010-Cus., dated 19-3-2010 issued by the Central Board of Excise and Customs, New Delhi, wherein the Board has clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit Rules, 2004. The Original Adjudicating authority granted the rebate which was denied by Commissioner (Appeals) on the ground that debit under Rule 3(5) of the said Rule is not payment of duty in terms of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and the impugned inputs/goods were not cleared directly from the factory or warehouse. The applicants has argued that the in terms of the provision of sub-rule (5) of Rule 3 of the Cenvat Credit Rules, 2004, an amount equal to Cenvat Credit availed on the input is liable to be reversed at the time of their clearance from the factory and in terms of explanation to sub-rule (4) of Rule 8 of the Central Excise Rules, 2002, the same is to be treated as duty. 8. Government notes that C.B.E. C. has clarified in Circular No. 6/2010-Cus., dated 19-3-2010 rebate under Rule 18 of Central Excise Rules, 2002 is admissible for supplies made from DTA to SEZ. In this case there is no disputes that goods are supplied to SEZ. The dispute is whether the Cenvat Credit reversed under Rule 3(4)(5) of Cenvat Credit Rules, 2004 is to be treated on payment of duty in terms of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. 9. The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(ii) of Central Excise Rules, 1944 (which is analogous to the Cenvat Credit Rules, 2002/Cenvat Credit Rules, 2004) on export of inputs/capital goods by debiting RG 23A Part II would be eligible for rebate. In these circumstances denial of rebate on the ground that the duty has been paid by reversing the credit cannot be sustained. 18. The argument of the Revenue that identity of the exported inputs/capital goods could not be correlated with the inputs/capital goods brought into the factory is also without any merit because, in the present case the goods were exported under ARE 1 form and the same were duly certified by the Customs Authorities. The certificate under the ARE 1 form is issued with a view to facilitate grant of rebate by establishing identity of the duty paid inputs/capital goods with the inputs/capital goods which are exported. 19. For all the aforesaid reason, we see no infirmity in the order passed by the Joint Secretary to the Government of India. Accordingly rule is discharged with no order as to costs. 10. The ratio of the abovesaid order of Hon ble High Court of Bombay is squarely applicable to this case. Government therefore holds that the reversal of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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