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TMI Blog2018 (7) TMI 2069X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed - decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... which was required to be safeguarded by way of debiting in the Bond. On plain reading of provisions of Rule 6(6) of the Cenvat Credit Rules, 2004, it appeared that the same area applicable to the goods which are dutiable and are moved without payment of duty for the reasons mentioned therein. Since the said goods manufactured by the assessee were exempted by virtue of aforesaid notification. It appeared that the case of the assessee is not covered under the said provisions and the assessee was not eligible to take Cenvat Credit in respect of inputs used in the manufacture of exempted goods which were exported. The irregular Cenvat credit so taken is utilized for payment of duty on clearance of other dutiable goods in the domestic market. 13. In this regard, I also refer sub-section (1A) which was inserted on 13-5-2005 in Section 5A of the Central Excise Act, 1944 which reads as under :- (1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond in terms of provisions of the Central Excise Rules, 2002." The petitioners had manufactured both dutiable and exempted final product (packaged software and printed books respectively). The petitioner has taken credit on input used in the manufacture of dutiable as well as exempted final products. If the exempted products are exported outside India the provisions of Rule 6(6)(v) of the Cenvat Credit Rules are applicable. Therefore, the bar provided under Rule 6(1) and the liability created under Rule 6(3)(b) of the Cenvat Credit Rules, 2004 are not attracted. By denying to the petitioner from exporting the printed books under bond what the respondents want to do is in fact to levy 10% on the sale price of the printed books in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2004. In our opinion this is wholly impermissible. The provisions as now contained in Rule 6 of the Cenvat Credit Rules, 2004 were contained in Rules 57C and 57CC of the Central Excise Rules, 1944 as they stood prior to 1st April, 2000. From 1st April, 2000 till 30th June, 2001 similar provisions were contained in Rule 57AD of the Central Excise Rules, 1944. In the context of these Rules circular dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould indicate that they relate to goods which are wholly exempt from duty. Rule 6(6)(i) relates to supply to SEZ. These are wholly exempted from duty vide Notification dated 19th October, 2001 and notification dated 22nd July, 2003. Rule 6(6)(ii) relates to supply of goods to Export-Oriented Units. These are wholly exempt by Notification dated 31st March, 2003. Rule 6(6)(iii) relates to goods supplied to a unit located in Electronic Hardware Technology Park or Software Technology Park. Such supplies are exempt from duty by Notification dated 31st March, 2003. Rule 6(6)(iv) relates to supplies to United Nations or an international organisation for their official use. These are exempt by Notification No. 108/95. Rule 6(6)(v) relates to export under bond. Rule 6(6)(vi) relates to gold or silver arising during refining of copper. These are exempt from payment of duty by Notification No. 5/2006-C.E., dated 1st March, 2006. It would thus be clear that all the clauses of Rule 6(6) are enacted only to deal with the situation when the final products are exempt from payment of duty. If a final product is not exempted from duty, Rule 6(1) is not attracted at all and hence Rule 6(6) is unneces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of copper or zinc by smelting." A perusal of the aforesaid Rules would clearly show that sub-rules (i) to (vi) are identical and the difference in Rule 6(6) of the Cenvat Credit Rules, 2004 and Rule 6(5) of the Cenvat Credit Rules, 2002 is not relevant for the purpose of the present case. Rules 6(1), 6(2), 6(3) and 6(4) of the Cenvat Credit Rules under Cenvat Credit Rules, 2002 as well as under the Cenvat Credit Rules, 2004 remains the same. As noted earlier the object and purpose of Rule 6(6) of Cenvat Credit Rules, 2004 is to promote the policy of the Government that the benefit of duty paid on input is available as credit in respect of certain exempted goods as well as the exempted goods exported under bond. The minor change in the wordings of Rule 6(6) of the Cenvat Credit Rules, 2004 by using the term "excisable goods" instead of exempted goods is that the term 'exempted goods' may not cover the dutiable goods which are exported under bond. Therefore, in order to widen and cover both dutiable and exempted goods exported under bond, Rule 6(6) of Cenvat Credit Rules, 2004 uses the expression "excisable goods". As an illustration, if a car which is dutiable is exported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on exported peppermint oil under Rule 18 of the Central Excise Rules, 2002. (3) Commissioner of Central Excise v. Drish Shoes Ltd., 2010 (254) E.L.T. 417 wherein it has been held as under :- 11. The only difference between the Rules of 2002 and 2004 is that while in case of 2002 rules, exception clause contained in sub-rule (5) of Rule 6 was applicable in case of only exempted goods, while exception clause contained in sub-rule (6) of Rule 6 of 2004 rules, applies both to exempted goods, as also goods subject to duty, because the term used in sub-rule (6) is "excisable goods" and not "exempted goods", as was the case in Rules of 2002. (4) Commissioner of C. Ex. and Cus., Aurangabad v. Jolly Board Ltd. - 2017 (50) S.T.R. 131 (Bom.) wherein it has been held as under :- 7. These appeals can only be entertained on substantial questions of law. As far as contention of the Learned Counsel for the appellant about observance of Rule 18 of the Central Excise Rules, 2002 is concerned, the same was not a subject matter of contention before the authorities or the Tribunal nor is raised in the present appeal. Even otherwise, the subject matter involved in the present app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as contained in Rule 6(5) of Cenvat Credit Rules, 2002 and Rule 6(6) of Cenvat Credit Rules, 2004, used in the manufacture of such goods, if the goods are exported. Question No. 1 is answered accordingly. 21. As regards question No. 2, it is clear from a bare reading of Rule 5 of Cenvat Credit Rules, 2004 that a manufacturer, who exports the final products which are exempt from duty, can claim refund of Cenvat. So, this question is also answered against the appellant." 8. It would be clear that in the decision of the Himachal Pradesh High Court, the judgment of this Court in case of Repro India Ltd. v. Union of India reported in MANU/MH/1449/2007 : 2009 (235) E.L.T. 614 (Bom.) is also relied, wherein it is held that expression "excisable goods" is wider than the expression "exempted goods" as it includes both dutiable and also exempted goods. 9. It is also submitted by the Learned Counsel Mr. Ladda that the judgment of the Himachal Pradesh High Court in case of Commissioner of Central Excise v. Drish Shoes Ltd. (supra) is confirmed by the Apex Court in Appeal No. 2887/2012. The Learned Counsel submits that the judgment in the case of Commissioner of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. The question of law, as framed, is answered in favour of the Assessee and against the Revenue. However, there will be no order as to costs. (6) Commissioner of Customs, Bangalore v. Spice Telecom, Bangalore - 2006 (203) E.L.T. 538 (S.C.) wherein it has been held as under :- 16. Revenue has relied upon the subsequent Notification No. 21/2002, dated 1-3-2002. The subsequent notification defines the scope of ancillary equipment for BTS by restricting the entry to only three equipments, namely, (i) Cellular repeaters, (ii) Amplifiers and (iii) Waves Guides (List 22 S. No. 239 of the Table). Radio terminals in this notification have not been considered as ancillary equipment of BTS. Revenue contends that Notification No. 21/2002 is clarificatory in nature and would be applicable to the radio terminals imported by the respondent in the year 1998 as well. We do not find any substance in this submission. The subsequent notification which defines the scope of ancillary equipment is effective only from 1-3-2002 and does not have retrospective effect. Respondent's clearance pertains to July, 1998 and the Notification No. 21/2002 has come into effect with effect from 1-3-2002. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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