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TMI Blog2015 (3) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated in the above said C.B.E. & C. Instructions. Respondent are clearing goods for home consumption on payment of duty @ 4% or 5% 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, respondent has to assess all goods whether cleared for export or home consumption in a same manner. He cannot assess export goods as higher rate of duty @ 10% and goods cleared for home consumption at lower rate of duty @ 4% or 5%. He has to choose any one notification and assess all clearance of goods in the same manner even if there are two effective rates of duty as per two notifications. In this case, the situation is different since Notification No. 2/2008-C.E. as amended prescribed duty at General Tariff rate of 10% whereas effective rate of duty is 4% or 5% vide Notification No. 4/2006-C.E. as amended. Even the Joint Secretary (TRU) C.B.E. & C. D.O. Letter, dated 29-2-2008 stipulated that rate of duty beneficial to assessee have to be extended. The said letter has not allowed payment of duty under both notifications. Assessee could have opted for one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 19/2004-C.E. (N.T.), dated 6-9-2004, being the duty paid Pharmaceutical goods exported, which were manufactured and cleared by M/s. Meditab Specialities Pvt. Ltd., Goa. The Deputy Commissioner, Central Excise, Mumbai-III allowed the said claim and sanctioned rebate claim vide impugned Orders-in-Original. 3. Being aggrieved, applicant department filed appeal before Commissioner (Appeals) on the ground that the manufacturer has paid Central Excise duty @ 10% along with education cess in terms of Notification No. 2/2008-C.E. (N.T.), dated 1-3-2008, as amended by the Notification No. 2/2008-C.E. (N.T.), dated 27-2-2008 instead of paying Central Excise duty @ 4% along with education cess in term of Notification No. 4/2006-C.E (N.T.), amended by Notification No. 10/2010-C.E. (N.T.), dated 27-2-2010. It is therefore, apparent that the assessee deliberately paid Central Excise duty at higher rate of 10% in order to claim higher amount of rebate claim. They are not eligible for rebate at higher rate and are eligible only for the effective tariff rate. Commissioner (Appeals) upheld the orders-in-original and decided the case in favour of department. 4. Being aggrieved by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) (3) 21 3001, 3003, 3004, 3005, 3006 10.10, 3006 10.20, 3006 20 00, 3006 30 00, 3006 40 00, 3006 50 00, 3006 70 00 and 3006 91 00 14% [Notification No. 2/2008-C.E, dated 1-3-2008] 4.3 Notification 2/2008, dated 1-3-2008 was issued by the Ministry of Finance to bring down the prevailing tariff rate from 16% adv. to 14% adv. across the board for a majority of excisable goods falling within the ambit of Central Excise Tariff Act, 1985 w.e.f. 1-3-2008 as the heading of the Notification clearly spells out. It should be kept in mind that Notfn. 4/2006, dated 1-3-2006 specifying concessional rate of duty 8% adv. was very much in effect for the said goods at this point of time. Ministry of Finance in the month of December 2008 vide Notfn. 58/2008, dated 7-12-2008 simultaneously amended Notification 2/2008, dated 1-3-2008 and Notfn. 4/2006, dated 1-3-2006 to uniformly lower the rates to 10% adv. and 4% adv. respectively. The tariff rate of 10% adv. was further revised down vide Notfn. 4/2009 to 8% adv. which was further amended and brought up to 10% adv. vide Notfn. 6/2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The contention that the claimant is entitled to the duty actually has been paid as rebate has also been misinterpreted by quoting the Apex Court decision in the case of Bharat Chemicals reported in 2004 (170) E.L.T. 568, in fact the intention of the judiciary in this case has to be correctly read as that the claimant is eligible to the duty legitimately paid as provided in law and not the duty whatever has been paid as concluded by the appellate authority. 4.8 In view of the above, in the instant case, the rebate of duty claimed by the merchant-exporter can only be allowed to the extent of duty rate at which home clearances are effected by the manufacturer and rest of the amount may have to refunded to the manufacturers Cenvat account on a separate application received from them as per the provisions of law. 4.9 The rebate of duty paid of the goods exported is governed by the provisions of Section 11B of the Act read with Rule 18 of Central Excise Rules and the notifications issued. Thereunder wherein it is prescribed that the Central Excise Duty and other duties paid can be claimed by exporter. Section 47 of the Finance Act, 1982 stipulates that the duty to be paid unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims. The department contested the rebate sanctioning order before Commissioner (Appeals) on the ground that as per the documents submitted with the claim, viz. original/duplicate copy of ARE ls issued by M/s. Cipla Ltd., and the Central Excise Invoices issued by the respective manufacturers, the manufacturer paid the Central Excise duty @ 10% along with proportionate Education Cess by claiming Notification No. 2/2008, dated 1-3-2008, as amended by Notification No. 6/2010-C.E., dated 27-2-2010, instead of paying Central Excise duty @ 4% under Notification No. 4/2006, dated 1-3-2006, as amended in order to provide higher amount of rebate for the merchant-exporter. Commissioner (Appeals) decided the cases in favour of respondent. Now, the applicant department has filed these revision applications on grounds mentioned in Para (4) above. 9. It is observed that Central Government issued Notification No. 2/2008-C.E., dated 1-3-2008 which has an 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 (export 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 respondent 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 fillers/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 dear-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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact brought down from 16% to 14% and then to 8% and finally to 10% by different amending notifications. The 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 good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the duty paid would mean duty paid under the provisions of Central Excise law. Since the duty was to be paid as per effective rate, excess duty paid cannot be rebated under Rule 18. In view of above position, Government upholds the applicability of above said C.B.E. C. Instructions in this case. 9.6 Respondent has relied upon number of case laws to the proposition that it was up to the assessee to choose a notification which is most beneficial to him. Government notes that in the cases cited namely CCE, Baroda v. Indian Petro Chemicals [1997 (92) E.L.T. 13 (S.C.)] 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 clearance but decided to avail benefit of both the notification. The apparent motive of clearing export goods at higher rate of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the Cenvat credit is to be refunded in the Cenvat credit account. 9.7.1 Hon ble Supreme Court has held in the case of CCE v. Parle Exports - 1988 (38) E.L.T. 741 (S.C.) that when a notification is issued in accordance with power conferred by statute, it has statutory force and validity and therefore exemption under notification is, as if it were contained in the Act itself. Apex Court has clearly observed that any exemption notification specifying effective rate has to be complied with. In this regard, Hon ble CESTAT Ahmedabad Bench in its judgment in the case of Mahindra Chemicals v. CCE, Ahmedabad - 2007 (208) E.L.T. 505 (Tri.-Ahmd.) while relying on above said Apex Court judgment has held that exemption notification has to be construed as if this rate was prescribed by statute and 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. 9.7.2 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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