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TMI Blog2015 (3) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated Cenvat credit through the said rebate claims. In this case, both the Notifications prescribed effective rates of duty. Notification No. 30/2004-C.E. prescribed nil rate of duty provided manufacturer does not avail Cenvat credit on inputs. This clarification does not say that duty can be paid at tariff rate when the exemption notification is existing. Simultaneously availment of these notifications is allowed in the said circular as they pertain to different situation like whether he is availing Cenvat credit or not. This circular is of no help to the applicant as in their case there are no two conditional notifications prescribing two effective rates. Moreover, there is no such circular issued in case of pharmaceutical products pertaining to Notification in question allowing their simultaneous availment. The other Circular No. 937/27/2010-CX, dated 26-11-2010 is not applicable as in the instant case there is no applicability of provisions of Section 5A(1A) of Central Excise Act, 1944. Place of removal may be factory/warehouse, a depot, premise of a consignment agent or any other place of removal from where the excisable goods are to be sold for delivery at place o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Assessee. None, for the Department. ORDER These revision applications are filed by the applicant M/s. Intas Pharmaceuticals Ltd., Plot Nos. 457 458, Village Matoda, Talukka Sanand, Ahmedabad against Orders-in-Appeal as reflected in the following table and passed by Commissioner of Central Excise (Appeals-I), Ahmedabad-II. TABLE Sl. No. Revision Application No. Filed against order-in-appeal No. 1-8 195/113-120/11-RA 224-231/2010(Ahd-II)CE/CMC/Commr(A)/Ahd 19-10-2010 9-12 195/175-178/11-RA 266-269/2010(Ahd-II)CE/CMC/Commr(A)/Ahd 30-11-2010 13-30 195/309-326/11-RA 288-305/2010(Ahd-II)CE/CMC/Commr(A)/Ahd 31-12-2010 31-47 195/393-409/11-RA 37-53/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 31-1-2011 48-63 195/467-482/11-RA 71-86/2011(Ahd-II)CE/CMC/Commr(A)/Ahd 28-2-2011 64-68 195/518-522/11-RA 110-114/2011( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying duty @ 4% for the goods cleared for home consumption they were required to pay at the same rate on the export goods also. Instead of paying duty @ 4% for export clearances, they paid duty @ 10%. The excess paid duty cannot be treated as duty paid in terms of Section 3 of Central Excise Act, 1944. Therefore, the rebate appeared admissible of the duty paid at effective rate of duty i.e. 4% in terms of Notification No. 4/2006-C.E., dated 1-3-2006 as amended. Further, the rebate claim is to be sanctioned on the basis of ARE-1 and FOB value whichever is lower. The adjudicating authority Assistant Commissioner, Central Excise Div.-IV, Ahmedabad-II Commissionerate after following due process of law, sanctioned cash rebate of duty paid @ 4% on the FOB/ARE-1 value whichever is lower and remaining amount was sanctioned by way of credit in their Cenvat account under Rule 18 of the Central Excise Rules, 2002 read with Section 11B of the Central Excise Act, 1944. 3. Being aggrieved by the said Orders-in-Original, applicants filed appeal before Commissioner of Central Excise (Appeals) who after considering all the submissions, upheld the impugned Orders-in-Original and rejected the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the position, as out of the two notifications namely, (1) Notification 4/2006-C.E., dated 1-3-2006 and (2) 2/2008-C.E., dated 1-3-2008, the applicants, have selected Notification 2/2008-C.E., dated 12-3-2008 and paid Central Excise duty accordingly, on the export goods and their selection cannot be denied by the Excise Authorities. 4.5 The original authority, has without appreciating the legality of the matter, wrongly issued directions, for re-credit of Central Excise Duty, at the rate of 6.18% Credit in the Cenvat Credit Account of the applicants, in lieu of issuance of a cheque of an equal amount and therefore, his Order-in-Original, was itself, bad in law. Orders-in-Appeal is also equally bad in law. 4.6 Chapter 9 of the Supplementary Instructions, issued by the Central Board of Excise Customs on 1-9-2001 which are valid today and wherein, the Central Board of Excise Customs, has clearly maintained that the expression, Refund , under Section 11B of the Central Excise Act, also means rebate of duty, paid on export goods. In terms of the Para 7.2 of the said Chapter 9 of the Supplementary Instructions, a refund or rebate, is always to be given only by a cheque an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r - 2010-TIOL-1410-CESTAT-Mum. 5. Personal hearing was scheduled in this case on 9-8-2012. Shri J.C. Patel, Advocate and Shri K.D. Dholakia, Deputy General Manager, Indirect-Tax appeared for personal hearing on behalf of applicants who reiterated the grounds of revision application. Nobody attended personal hearing from respondent side. 6. Government has carefully gone through the relevant case records and perused the impugned Orders-in-Original and Orders-in-Appeal. 7. Government notes that some of the revision applications are filed by the applicants with delay of seven days to thirty-eight days. They have submitted that they have sent the revision application through courier which were delivered to this office within time but they could not provide the copy of original receipt of the revision application to office. They have simply provided electronic tracking details of the courier agency as only proof of receipt which they have. However, they have also requested to condone the delay. They have also filed the applications for condonation of the delay and submitted that the said delay has occurred on behalf of postal authorities and the circumstances beyond their contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial to them, that they are eligible to rebate of duty paid @ 10% on export goods, that department s contention regarding allowing rebate of duty paid on lower value appearing in two documents ARE-1 Shipping Bill has no authority of law and same is not legally sustainable. 10. Government notes that applicants were availing Notification No. 4/2006-C.E., as amended till Feb., 2010 in respect of all clearances made both for home consumption as well as for exports by paying duty @ 4% only. All the rebate claims were being sanctioned accordingly. From March/April, 2010 onwards applicants started paying duty @ 10% in terms of Notification No. 2/2008-C.E. as amended on export goods and claimed rebates of duty paid at higher rate. Applicants apparently opted to pay duty on export clearances at higher rate so as to encash the accumulated Cenvat credit through the said rebate claims. 10.1 It is observed that Central Government issued Notification No. 2/2008-C.E., dated 1-3-2008 which has a effect of reduction in general rate of Central Excise Duty on various products from 16% to 14%. Thereafter, this notification was amended by Notification No. 58/2008-C.E., dated 7-12-2008 reducing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same product/item being covered by more than one notification cannot be ruled. In such a situation, the rate beneficial to the assessee would have to be extended if he fulfils the attendant conditions of the exemption. 3. Drugs and Pharmaceuticals 3.1 Excise duty on drugs and pharmaceuticals falling under Heading Nos. 3001, 3003 (except Menthol crystals), 3004, 3005 and 3006 (except 3006 60 and 3006 92 00) has been reduced from 16% to 8%. Thus, the general effective rate for all goods of Chapter 30 is now 8%. However, certain specified items such as life saving drugs continue to be fully exempt. Excise duty has been fully exempted on Anti-AIDS drug ATAZANAVIR, and bulk drugs for its manufacture. The Joint Secretary (TRU) C.B.E. C. has made it amply clear that reduction in General Tariff Rate has been carried out by Notification and therefore there could be a possibility of same item being covered by two notifications and directed that the rate beneficial to assessee may be extended. In the instant case, the applicant has availed both the rates of duty, which is not allowed in TRU letter. Here basically the issue involved is whether rebates of duty paid at tariff ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing in this list to 8 per cent, which I propose to do, with the following major exceptions : food items; and drugs, pharmaceuticals and medical equipment. Some of the other items on which I propose to retain the rate of 4 per cent are : paper, paperboard their articles; items of mass consumption such as pressure cookers, cheaper electric bulbs, low priced footwear, water filters/purifiers, CFL etc.: power driven pumps for handling water and paraxylene. Further, the Hon ble Finance Minister in his speech while presenting the Union Budget for 2010-11 in the Parliament stated that : PART-B Indirect-Taxes 142. Unlike the time I presented the last Budget, symptoms of economic recovery are more widespread and clear-cut now. The three fiscal stimulus packages that the Government introduced in quick succession have helped the process of recovery significantly. The improvement in our economic performance encourages a course of fiscal correction even as the global situation warrants caution. Therefore, I propose to partially roll back the rate reduction in Central Excise Duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification No. 4/2006-C.E., dated 1-3-2006 as amended prescribed effective rate of duty from initial rate of 0% to 8% and finally to 4% by different amending notifications. As such it is not correct to say that it is a case of applicability of two notifications only and assessee is at liberty to choose any one notification which is beneficial to him. In this case, Notification No. 2/2008-C.E., as amended provided for general tariff rate of duty and Notification No. 4/2006-C.E., as amended provided for effective rate of duty and they have to be strictly construed as such. Therefore they have to be read together as stipulated in Para 4.1 of Part-I of Chapter 8 of C.B.E. C. Excise Manual. In fact, this confusion has arisen since in this case the general tariff rate was reduced through Notification when special economic stimulus package was announced in 2008 by Government to deal with ongoing economic recession. Normally changes in General tariff rate are carried out through Finance Bill/Act. Government, therefore is of the view that duty was payable @ 4% on the export goods also and rebate cannot be granted on the duty paid in excess of effective rate prescribed in the Notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the cases cited namely CCE, Baroda v. Indian Petro Chemicals and HCL Ltd. v. CC, New Delhi, Hon ble Supreme Court has held that when two notifications co-exist simultaneously, then assessee has the option to choose any one of the notifications beneficial to him. Hon ble Apex Court has categorically held that in such a situation assessee has option to choose any one notification. Apex Court has not stated that assessee can avail both the notifications simultaneously. Whereas in the instant case applicant has not chosen one notification for all the clearances but decided to avail benefit of both the notifications. The apparent motive of clearing export goods at higher rate of duty @ 10% and goods for home consumption at 4% is to encash the accumulated Cenvat credit. In terms of above said judgments also, the applicant is required to choose one notification whereas he has acted otherwise. Moreover, the said judgments are not in the context of sanctioning of rebate claims in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 of the duty paid either at general tariff rate or at the effective rate. The cited case laws mainly re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the Legislature has decided to exempt certain goods by notification, the exemption cannot be negated by an assessee by opting for payment of duty. 10.8.2 Hon ble Supreme Court has also held in the case of M/s. Belapur Sugar and Allied Industries Ltd. v. CCE - 1999 (108) E.L.T. 9 (S.C.) that even if duty paid under ignorance of law or otherwise, the rebate cannot be refused since party has paid the duty. Further, Hon ble Apex Court has held that if the duty paid shown to be not leviable or entitled for rebate, the Revenue has to refund, adjust, credit such amount to the assessee as the case may be. 10.8.3 Government also notes that Hon ble High Court of Punjab Haryana has examined the identical issue in the case of M/s. Nahar Industrial Enterprises Ltd. v. UOI - 2009 (235) E.L.T. 22 (P H) wherein assessee had paid duty on export goods at tariff rate of 16% ignoring the exemption Notification No. 29/2004-C.E. and 30/2004-C.E. both dated 9-7-2004 prescribing duty @ 4% and nil respectively. Hon ble High Court has upheld the Government of India Revision Order upholding the order of original authority. In this case, original authority had allowed rebate of duty paid at eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 134 (GOI) during hearing of case held on 9-8-2012. Government notes that in the cited case, there were two exemption notifications which were availed simultaneously in terms of C.B.E. C. Circular dated 28-7-2004. In case of home consumption clearance, no Cenvat credit was availed and clearances were made at nil rate. Assessee was also maintaining separate accounts for both types of clearance as required in the C.B.E. C. Circular. Government did not allow rebate of duty paid at tariff rate @ 16% but rebate claim was allowed of the duty paid at the effective rate of 4% in terms of Notification No. 29/2004-C.E. 11. In view of position explained in foregoing Paras 9 10, Government finds that there is no merit in the contentions of applicant that they are eligible to claim rebate of duty paid @ 10% i.e. General Tariff Rate of Duty ignoring the effective rate of duty @ 4%. Government is of the considered view that lower authorities are legally right in holding that duty was payable @ 4% in terms of exemption Notification No. 4/2006-C.E., dated 1-3-2006 as amended and rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% in terms of Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchase with their grammatical variations and cognate expression, mean any transfer of the possession of goods by one person on another in ordinary course of trade or business for cash or deferred payment or other valuable consideration. 13.3 Place of removal has been defined under Section 4(3)(c)(i), (ii), (iii) as : (i) A factory or any other place or premises of production of manufacture of the excisable goods; (ii) A warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) A depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory 13.4 Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is also relevant which is reproduced below :- Rule 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar No. 510/06/2000-CX, dated 3-2-2000. In this regard, the Government observes that w.e.f. 1-7-2000, the concept of transaction value was introduced for valuation of goods under Central Excise Act and therefore said Circular issued prior to the introduction of transaction value concept, cannot be strictly applied after 1-7-2000. As per para 3(b)(ii) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, the rebate sanctioning authority has to satisfy himself that rebate claim is in order before sanctioning the same. If the claim is in order he shall sanction the rebate either in whole or in part. The said para 3(b)(ii) is reproduced below : 3(b) Presentation of claim for rebate to Central Excise :- (i) .. (ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount in Cenvat credit is appropriate. As such the excess paid amount/duty is required to be returned to the respondent in the manner in which it was paid by him initially. 14. In view of above discussion, Government observes that original authority and appellate authority have rightly sanctioned the rebate claim to the extent of duty paid at effective rate of duty @ 4% in terms of Notification No. 4/2006-C.E., dated 1-3-2006 as amended, on the transaction value determined in these cases in terms of Section 4 of Central Excise Act, 1944. The amount of duty paid in excess of duty payable at effective rate of 4% as per Notification No. 4/2006-C.E., as amended on the transaction value of exported goods, is to be treated as voluntary deposit made by applicant with the Government. In such cases where duty is paid in excess of duty actually payable as held by Hon ble Apex Court in the case discussed in Para 10.8.2 and also held by Hon ble High Court of Punjab and Haryana as discussed in Para 10.8.3 above, the excess paid amount is to be returned/adjusted in Cenvat credit account of assessee. Moreover Government cannot retain the said amount paid without any authority of law. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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