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TMI Blog2017 (6) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Civil Application No. 7339 of 2017 - - - Dated:- 9-6-2017 - Mr. S.R.Brahmbhatt And Mr.A.G.Uraizee JJ. For the Petitioners : Raj K Vyas, Advocate For the Respondent : Mr Devang Vyas, Asg And Mr Ankit Shah, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT) 1. Shri Ankit Shah, learned ASG makes a statement that order produced at page 21 squarely covers the issue and Department has not challenged the same in any respect. The Court may pass appropriate order. 2. Rule. Shri Vyas, learned ASG and Shri Shah, learned advocate waives service of notice of Rule on behalf of respondent Nos. 1 and 2 3 respectively. By consent, Rule is fixed forthwith. 3. By this petition under Article 226 of the Constitution of India, the petitioners have challenged the orders (i) Rebate/1543- 1561/ Centurion/Div-I/16-17 dated 28.11.2016; (ii) Rebate/1584-1585/ Centurion/Div-I/16-17 dated 29.11.2016; (iii) Div-III/CE/175-179/Reb/16-17 dated 30.12.2016; (iv) Div-III/CE/125-127/Reb/16-17 dated 18.12.2016; (v) Rebate/1898-1903/Centurion/Div-I/16-17 dated 12.01.2017 (vi) Div-III/CE/198-200/Reb/16-17 dated 15.02.2017, passed by the Assistant Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 6. 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 the issue is, thus, settled by a direct decision of this court, it was not open to the adjudicating authority to disallow the rebate claim of the petitioners. The attention of the court was invited to the decision of this court in the case of Zenith Spinners v. Union of India (supra), to point out that Notification No.10/2004-CE (NT) dated 03.06.2004 has been struck down by this court as being ultra vires the Central Excise Rules, 2002 and hence, it was not permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) 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, 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. 11. A perusal of the order dated 28.08.2015 of the Supreme Court reveals that before the Supreme Court, on behalf of the respondents, a submission was made that in any case, the said notification would apply prospectively and that the Central Board of Excise and Customs had thereafter issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 so on the specious plea that the inputs used in manufacture of such final products were procured without payment of duty. There is no rationale for such course of action apart from the fact that, as stated hereinbefore, the relevant Rules do not envisage any such requirement. Xxxxx 14.There is one more reason. As can be seen from reading of Sub-rule (1) and Rule (2) of Rule 19 of the Rules the opening portion grants an option to the exporter by virtue of the language used. In Sub-rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Collectively) are also quashed and set aside. 13.The above referred 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 Notification No.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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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