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TMI Blog2013 (5) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise, Raigad against the Orders-in-Appeal No. YDB/209-220/RGD/2010, dated 31-8-2010 passed by the Commissioner of Customs (Appeals), Raigad with respect to Orders-in-Original passed by the Assistant Commissioner of Central Excise, Raigad. M/s. Vinati Organics Ltd., Raigad is the respondent in this case. 2. Brief facts of the case are that Assistant Commissioner, Central Excise, Mahad Raigad vide impugned Orders-in-Original had sanctioned rebate of duty paid on inputs used in the manufacture of Isobutyl Benzene, which was exported under bond under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004. Department filed appeals before Commissioner (Appeals) against the said Orders-in-Original on the grounds that the inputs used were imported and were procured under various bills of entries, such bills of entry are not covered under condition No. 3 of the Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and therefore, the said condition was not fulfilled; that the duty was not paid at the time of import in cash and the same was debited in DEPB scrip; that the rebate has been allowed in respect of additional duty leviable under sub-section (5) of Section 3 of Customs Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... departmental stand. 3.5 Commissioner (A) reliance on CCE v. Simplex Pharma Pvt. Ltd. - 2008 (229) E.L.T. 504 (P H) is also not applicable inasmuch as Hon ble High Court had decided the applicability of refund when the duty is paid through Cenvat credit. However, it does not deal with the present situation as to whether the rebate of duty discharged through DEPB scrip is admissible or not. 4. Show cause notices were issued to the respondent under Section 35EE of Central Excise Act, 1944 to file their counter reply. The respondent vide their written submission dated 26-8-2011 mainly stated as follows : 4.1 Plain reading of Rule 18 would show that it seeks to neutralize the tax effect by granting rebate/refund of (i) duty paid on export goods, or (ii) duty paid on inputs used in the manufacture or processing of export goods. Respondents have met with these essential conditions of Rule 18 above. 4.2 Basic condition of Notification No. 21/2004 C.E. (N.T.) is that the inputs should have been used in the manufacture or process of exported goods to be eligible for claiming rebate/refund. The fact that the inputs for which rebate is claimed have been used in the manufacture/p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court vide 2009 (244) E.L.T. A121 (S.C.). 5. Personal hearing scheduled in this case on 5-3-2013 was attended by Shri T.R. Rustagi, Advocate and Shri N.K. Goyal, C.F.O on behalf of the respondent who reiterated submission made in their written reply dated 26-8-2011. Nobody appeared for hearing on behalf of applicant department. 6. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 7. Government observes that the applicant exported the goods and filed input rebate claims of duty paid on inputs used in manufacture of exported goods, under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004. The rebate claims were initially sanctioned by the original authority. Department filed appeals before Commissioner (Appeals) against the impugned Orders-in-Original on the grounds that the inputs used were imported and procured under various bills of entries. Such bills of entry are not covered under condition No. 3 of the Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and therefore, the said condition was not fulfilled; that the duty was not paid at the time of import in cash and the same was debited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bit in DEPB is devoid of merits. 5. It is, therefore, clarified that the benefit of DEPB Scheme should be allowed on exports even though the inputs used in the manufacture of the export product were cleared through DEPB route. The letter F. No. 605/11/2004-DBK, dated 12-4-2004 of OSD (Drawback) addressed to CC CE, Indore stands withdrawn. From above circular it is made ample clear that benefit of DEPB is available in those exports also when the exported goods were manufactured from the inputs which were imported under debit of DEPB scrip. 8.2 Further para 2 of the Board s circular No. 41/2005-Cus., dated 28-10-2005 reads as under : 2. The matter has been examined by the Board. Hitherto, the additional customs duty paid in cash only was adjusted as CENVAT credit or duty drawback while the same paid through debit under DEPB was not allowed as duty drawback. In the Foreign Trade Policy 2004-2009, which came into force w.e.f. 1-9-2004, it has been provided under paragraph 4.3.5 that the additional customs duty/excise duty paid in cash or through debit under DEPB shall be adjusted as Cenvat credit or Duty Drawback as per the rules framed by the Department of Revenue. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision available for payment of education cess through DEPB scrip, so the said payment cannot be treated as payment of duty and hence rebate of education cess paid through DEPB scrip is not admissible. 9.1 It is further contended by department that bill of entry is not a specified duty paying document is condition No. 3 of Notification No. 21/2004-C.E. (N.T.). In this regard Commissioner (Appeals) in his findings in the impugned Order-in-Appeal has observed as under :- It is contended by the Revenue that condition No. 3 of the notification required the materials to be brought under an invoice issued under Rule 11 of the Central Excise Rules, 2002 and the said condition has not been fulfilled as the imported material had been brought under Bills of Entry. The notification grants the rebate subject to the condition and the procedure specified hereinafter . What is specified thereafter at Sr. No. 3 only lays down the procedure for procurement of material from registered factories. This cannot be applicable to material procured from other sources. The manufacturers wanting to use imported material cannot possibly procure such material from registered factories. The law does n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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