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TMI Blog2017 (3) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Government under rule 18 of the rules and has, accordingly, declared the same to be bad in law and quashed and set aside the same. Therefore, it is the entire notification which has been set aside and not merely the retrospective applicability thereof. The decision would be squarely applicable to the facts of the present case, and the distinction sought to be drawn by the adjudicating authority is misconceived. This court having struck down N/N. 10/2004-CE(NT) dated 3rd June, 2004 it was not permissible for the adjudicating authority to place reliance upon the same for the purpose of denying the benefit of rebate to the petitioners. The impugned order being in direct conflict with the law laid down by the jurisdictional High Court, therefore, cannot be sustained. Since the rebate claims have been disallowed solely on the basis of N/N. 10/2004-CE(NT) dated 3rd June, 2004, no useful purpose would be served by remanding the matter to the adjudicating authority and the rebate claims deserve to be allowed. Petition allowed - decided in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 16331 of 2016 - - - Dated:- 6-3-2017 - MS. HARSHA DEVANI AND MR. A.S. SUPEHI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is the case of the petitioners that during the course of the adjudication proceedings it was pointed out to the adjudicating authority that the said notification had been declared ultra vires the rules by this court in the case of Zenith Spinners v. Union of India (supra) and hence could not be relied upon. Despite the aforesaid position, the adjudicating authority rejected the rebate claims of the petitioners by seeking to distinguish the above referred decision of this court and by relying upon a clarification issued by the Central Board of Excise and Customs. Being aggrieved, the petitioners have filed the present petition. 4. Mr. Devan Parikh, Senior Advocate, learned counsel with Mr. Harshal Shah, learned advocate for the petitioners, submitted that the impugned order passed by the adjudicating authority is ex-facie without jurisdiction. It was submitted that the authorities functioning under any enactment in the State of Gujarat are duty bound to follow the pronouncements of this court, under the circumstances, there can be no question of the Assistant Commissioner of Central excise seeking to distinguish any pronouncement of this court. It was submitted that when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India v. Zenith Spinners (supra) and has observed that the decision of this court is applicable to the period prior to the issuance of the Notification No.10/2004 dated 02.06.2004, whereas in the facts of the present case, the rebate claims are after the applicability of the Notification No.10/2004 dated 02.06.2004 and hence, the same is not applicable to the present case. 8. A perusal of the decision of this court in the case of Zenith Spinners v. Union of India (supra) clearly shows that the same does not in any manner say that the same would be applicable only to the retrospective applicability of the notification. In the said decision, the court has held that the impugned notification being Notification No.10/2004/C.E. (N.T.) dated 3rd June, 2004 is bad in law for the reasons recorded in the order, namely, that it is not in consonance with the principal provisions, namely, rules 18 and 19 of the rules, and that it is, even otherwise, revenue neutral. The court held that the Central Board of Excise and Customs cannot exercise powers under rule 19 of the rules to negate a notification issued by the Central Government under rule 18 of the rules and has, accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 12. Therefore, on a plain reading of both the Rules i.e. Rules 18 and 19 it is apparent that the said Rules operate in separate fields. Rule 18 of the Rules comes into play only in relation to the final products or the inputs which are not only liable to duty but on which duty has been paid. The said Rule viz. Rule 18 of the Rules, cannot be invoked in case of either final products or inputs on which no duty is paid even though the goods are liable to duty. The insistence of the respondent authorities, in the circumstances, that in a case where an exporter exercises option under Page 0035 Sub-rule (2) of Rule 19 of the Rules in relation to inputs, which may be duty free, or which are removed without payment of duty on execution of bond, when used for the purposes of manufacture or processing of final products which are exported, the exporter must export the goods only under Rule 19(1) of the Rules is not borne out by the provisions of the Rules. 13. In a case where the final product itself is liable to duty and the exporter, on clearance of such goods for export, makes a claim for rebate on payment of duty at the time of clearance, cannot be prevented from doing s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable with the Page 36 CBEC. The Board is a creature of the statute and cannot go beyond the powers granted under the statute. If the Central Government has, in its wisdom, provided for granting rebate upon fulfillment of certain conditions and subject to certain procedural safeguards, CBEC cannot be permitted to render the Notification issued by the Central Government redundant by issuing a notification in exercise of powers under Rule 19 of the Rules. Nor can CBEC exercise such powers so as to render Rule 18 otiose. Hence, for this reason also, the impugned Notification cannot be upheld. 18. In the circumstances, the impugned Notification being Notification No. 10/2004-CE(NT) dated 3rd June, 2004 is bad in law for the aforestated reasons, namely, it is not in consonance with the principal provisions, namely, Rules 18 and 19 of the Rules, and it is, even otherwise, Revenue neutral. The CBEC cannot exercise power under Rule 19 of the Rules to negate a notification issued by the Central Government under Rule 18 of the Rules. The same is, therefore, declared to be bad in law and is quashed and set aside. As a consequence the impugned show cause notices (Annexure-C Collectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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