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TMI Blog2015 (3) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 Notification No. 4/2006-C.E., dated 1-3-2006. Government observes that original authority and appellate authority have rightly restricted the rebate claim to the extent of dut2y paid @ 4% (BED) in terms of Notification No. 4/2006-C.E., dated 1-3-2006. The amount of duty paid in excess of duty payable at effective rate of 4% as per Notification No. 4/2006-C.E. is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IND-CE/000/ APP/228-232/11 dated 14-6-2011 ------do------ 8. 195/03-07/11-RA M/s. Zest Pharma IND/CE/000/ APP/382-386/11 dated 28-9-2011 ------do------ 9. 195/442-446/12-RA M/s. Zest Pharma IND/CE/000/ APP/07-11/12 dated 13-7-2011 ------do------ 10. 195/1079/12-RA M/s. Zest Pharma IND/CE/000/ APP/290/11 dated 13-7-2011 ------do------ 2. Briefly stated the facts of these cases are that applicants exported goods namely pharmaceuticals/medicaments falling under CETH 3004 on payment of duty and filed 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. During scrutiny of rebate claims it was observed that assessee had paid duty on exported goods in terms of Notification No. 2/2008-C.E., dated 1-3-2008 as amended, @ 10% adv. through their Cenvat credit account. Prior to Budget 2010, effective rate of duty on such goods was 4% in terms of (entry No. 62-C) of Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.3 By now it is settled question of law that when the Legislature has enacted two different Tariff Notifications, in respect of same finished excisable goods, it is upto the Central Excise assessee, to choose one which is most beneficial to him, for a given consignment of the finished excisable goods. This 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 1-3-2008 and paid Central Excise duty accordingly, on the export goods and their selection cannot be denied by the Excise Authorities. 4.4 The original authority has, without appreciating the legality of the matter, wrongly issued directions, for recredit 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 Orders-in-Original, itself, were bad in law. Orders-in-appeal is also equally bad in law. 4.5 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E, Belapur - 2010-TIOL-1410-CESTAT, Mum. 1997 (94) E.L.T. 139 (Tribunal) - Modi Xerox Ltd. v. Collector of Central Excise, Meerut. 2007 (218) E.L.T. 547 (Tri.-Chennai) - Cipla Ltd. v. Commissioner of Central Excise, Chennai. 2009 (235) E.L.T. 223 (Guj.) - Commissioner of Central Excise Customs, Vadodara-II v. Jayant Oil Mills. 1986 (24) E.L.T. 279 (Mad.) - Inspector of Central Excise, Sivakasi Another v. S. Sornam. 2005 (190) E.L.T. 511 (Tri.-Bang.) - Commissioner of Central Excise, Hyderabad-I v. Premier Mushroom Farms. 2004 (170) E.L.T. 87 (Tri.-Del.) - Steel Shape India Ltd. v. Commissioner of Central Excise Customs, Ghaziabad. 1996 (87) E.L.T. 290 (Tribunal) - Jay Dye Chem Industries v. Commissioner of Central Excise, Rajkot. 1987 (28) E.L.T. 144 (Tri.) - German Remedies Limited, Bombay v. Collector of Central Excise, Bombay. 1986 (25) E.L.T. 318 (Tri.) - Indye Chemicals, Ahmedabad v. Collector of Central Excise, Ahmedabad. 2002 (146) E.L.T. 241 (S.C.) - Metal Forgings v. Union of India. 1987 (28) E.L.T. 53 (S.C.) - Gokak Patel Volkart Ltd. v. Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9.1 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 the said general rate from 14% to 10%. Vide Notification No. 4/2009-C.E., dated 24-2-2009, said Notification 2/2008-C.E. was further amended to reduce the general rate of duty from 10% to 8%. Finally the Notification No. 2/2008-C.E. was amended by Notification No. 6/2010-C.E., dated 27-2-2010 to enhance the said general rate of duty from 8% to 10%. Pharmaceutical drugs and medicines falling under Chapter 30 of First Schedule to Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced 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 rate or effective rate is to be allowed and not exactly regarding applicability of two notifications for payment of duty. 9.3 It is felt that it is necessary to go into background to find out the reason behind the issue of these two notifications. Notification No. 4/2006-C.E., dated 1-3-2006 when issued, originally did not prescribe any concessional rate of duty to medicaments of Chapter Heading 3004 and a concessional rate of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 valorem. - From above, it is noted that intention of legislature behind said two notifications is best revealed in the above said budget speeches of Hon ble Finance Minister. It is quite clear that Notification No. 2/2008-C.E., dated 1-3-2008 (14%) and subsequent amending Notification No. 58/2008-C.E., dated 7-12-2008 (10%), 4/2009-C.E., dated 24-2-2009 (8%) and 6/2010-C.E., dated 27-2-10 (10%), were issued to reduce/alter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification No. 4/2006-C.E., dated 1-3-2006 as amended, as stipulated in the above said C.B.E. C. Instructions. 9.5 Further, it is also noticed that applicant are clearing goods for home consumption on payment of duty @ 4% in terms of Notification No. 4/2006-C.E. as amended. The above said C.B.E. C. Instructions state that export goods are to be assessed in the same manner as the goods for home consumption. So, applicant has to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relate to admissibility of exemption notification benefit in case of dispute of classification/eligibility of claimant. None of the said judgment are on the issue of sanctioning rebate of duty paid on exported goods. For applicability of the cited precedents Government is of the opinion which is guided by the observations of Hon ble Supreme Court in Para 10 of the judgment in case of Escorts Ltd. v. CCE, Delhi-II - 2004 (173) E.L.T. 113 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x 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. 9.8.3 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 effective rate of 4% and allowed recredit of balance amount in the Cenvat credit account of assessee. 9.9 Applicants have relied upon C.B.E. C. Circular No. 795/28/2004-CX., dated 28-7-2004 and 937/27/2010-CX., dated 26-11-2010 in support of their claim that they can avail both the notifications. In this regard, Government observes that subsequent to Budget, 2004 number of changes were made in the Excise duty structure on Texti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 4/2006-C.E., dated 1-3-2006. Government observes that original authority and appellate authority have rightly restricted the rebate claim to the extent of dut2y paid @ 4% (BED) in terms of Notification No. 4/2006-C.E., dated 1-3-2006. The amount of duty paid in excess of duty payable at effective rate of 4% as per Notification No. 4/2006-C.E. 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 9.8.2 and also held by Hon ble High Court of Punjab Haryana as discussed in para 9.8.3 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, the lower authorities have rightly allowed the recredit of said excess paid amount of duty in their Cenvat credit account. 11. In view of above discussions, Government finds no infirmity in the impugned orders and therefore upholds the same. 12. These revision applications are therefore rejected being devoid of merit. 13. So, ordered. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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