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TMI Blog2024 (10) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt. Rule 2(d) of Cenvat Credit Rules, 2004 defines exported goods to mean excisable goods which are exempt. Clause 1 (1.2) of Part V of the CBEC s Excise Manual of Supplementary Instructions 2005 clarifies that in Rule 18 and in the notification allowing rebate, the expression export goods has been used, which refers to excisable goods (dutiable or exempted) as well as non-excisable goods. It is further clarified that the benefit of the input stage rebate can be claimed on the export of all finished goods, whether excisable or not - the contention of the revenue that the goods exported were exempted under Notification No. 3 of 2006 and the petitioner was not required to pay duty and consequently cannot claim a rebate under Rule 18 is contrary to the said clarification. Notification No. 19/2004 dated 6th September 2004 as amended from time to time under Central Excise Rule 18 providing for procedure, conditions and limitations for the grant of rebate of duty do not state that if the Petitioner has wrongly paid excise duty (assuming the department s contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany engaged in the manufacturing Biscuits, Confectioneries, etc. This product biscuit is exigible to excise duty under Section 4A of the Central Excise Act based on its Maximum Retail Price ( MRP ). The products manufactured by the Petitioner are cleared for home consumption and export. With respect to biscuits cleared for home consumption, Petitioner is claiming exemption under notification No. 3/2006-CE dated 1st March 2006 since the biscuits are cleared in packaged form with per kg. Retail Sale Price (RSP) not exceeding Rs. 100/-. However, the said biscuits, when exported, do not bear the retail sale price in rupees and as specified in notification No. 3/2006. Therefore, the Petitioner paid duty on the export under Section 4 of the Central Excise Act, 1944 on clearance of goods for export based on the transaction value. 3. The excise duty paid on clearance for exports of biscuits is claimed as a Rebate under Rule 18 of the Central Excise Rules, 2002. Assistant Commissioner of Central Excise, Kalyan Division Respondent No. 3 denied the said claim of the Petitioner on the ground that the exemption notification does not provide for any condition and since for computation of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order passed by the Commissioner of Central Excise, Thane, dated 12th August 2009 (which was relied in O-I-O), which pertained to disallowing Cenvat Credit availed in respect of inputs used in such exempted biscuits cleared for export and for which recovery proceedings were initiated. 6. It is on this backdrop that the Petitioner is before us challenging the order of reversal passed by the Revisional Authority. Submissions of the Petitioner:- 7. Ms. Patil, learned counsel for the Petitioner submitted that for claiming exemption under notification No. 03 of 2006, the retail sale price per kg. of biscuits in package form should not exceed Rs. 100/-. She contends that since goods are exported, the provisions of the Standards of Weights and Measures Act and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are not applicable. Consequently, the retail price does not get reflected on the package to show the value in rupees. Therefore, the goods cleared for export do not qualify for exemption, and hence, they paid the duty, which is claimed by way of rebate under Rule 18 of the Central Excise (No. 2) Rules, 2001. Alternatively, she submits that if the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and the Original Authority. 10. We have heard learned counsel for the Petitioner and the Respondent and have also perused the documents and judgments which were brought to our notice during the course of the hearing. Analysis and Conclusions:- 11. Entry No. 18A of notification No. 3/2006 dated 1st March 2006 granting exemption reads as under :- S.No. Chapter or heading or subheading or tariff item of the First Schedule Description of excisable goods Rate Condition No. (1) (2) (3) (4) (5) 18A. 1905 31 00 or 1905 90 20 Biscuits cleared in packaged form, with per kg. retail sale price equivalent not exceeding Rs. 100. Explanation 1 Retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is sole consideration for such sale. Explanation 2 per kg. retail sale price equivalent shall be calculated in the following manner, namely :- If the package contains X gm of biscuits and the declared retail sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Petitioner under Section 4 of the Central Excise Act, 1944. Therefore, the contention of the revenue that Petitioner s exported goods were exempted under notification No. 3/2006 cannot be accepted and consequently the whole basis of rejecting the claim of rebate that goods are exempted and the Petitioner was not required to pay duty as per Section 5A (1A) of Central Excise Act and, therefore, cannot get a refund/rebate falls to the ground. 15. Assuming, the contention of revenue that the goods exported are exempted under notification No. 03/2006 is accepted, then in that scenario, we fail to understand as to under what authority of law the revenue retained the duty paid (as per revenue wrongly paid) by the Petitioner since, in that case, retention would be contrary to Article 265 of the Constitution of India which provides that no tax shall be levied or collected except by authority of law. Suppose the revenue s case that goods under consideration exported are exempt is to be accepted. In that case, the amount collected under Section 4 of the Central Excise Act will amount to collection without the authority of law. 16. We do not agree with the contention of the revenue that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the submissions made by the revenue, the Tribunals have rejected the said submissions and allowed the rebate claimed or allowed Cenvat Credit in terms of Rule 19 of the Central Excise Rules. The revenue has not been able to refute these decisions rendered by the Tribunal and which have been accepted by the revenue and, therefore, on this count also, the revenue respondents cannot argue contrary after having accepted on merits the decision rendered on identical fact situation. 20. The claim of the Petitioner is under Rule 18 of the Central Excise Rules, 2004, which provides that where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and on fulfillment of such procedure, as may be specified in the notification. Section 2(d) of the Central Excise Act, 1944 defines excisable goods to mean goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt. Rule 2(d) of Cenvat Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is indicated in Explanation 1 and the method of calculation of per kg. retail sale price equivalent is given in Explanation 2. Therefore, the availability of the exemption depended upon all these factors. Hence, it cannot be concluded that the exemption was absolute and unconditional. By holding the exemption to be absolute and unconditional, the Commissioner (Appeals) committed a grave error. 24. The availing of Cenvat credit by the petitioner, was considered by the Commissioner (Appeals) to be irrelevant. But such an opinion goes contrary to the decision of a Division Bench of the Bombay High Court in Repro India Ltd. v. Union of India, wherein the High Court of Bombay pointed out that the failure to fulfill export obligations, may result in other consequences and that therefore the grant of Cenvat credit is a matter of relevance. 25. In Commissioner v. Suncity Alloys Pvt. Ltd., a Division Bench of the Rajasthan High Court was concerned with a claim for rebate of duty, on the goods exported by the assessee. The Revenue raised a similar contention as they have raised now to the effect that the goods were exempt from payment of duty and that therefore the amount paid by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahindra (supra), this Court held that exemption was unconditional since there was no condition prescribed in Column No. 5 and the description of the goods read as All goods (except road tractors for semi-trailers of engine capacity more than 1800 cc) which matched with the goods cleared. In the case before us, the description of the goods specified in notification no. 3 of 2006 does not match the description of the goods which are exported by the Petitioner since, in the case of export, the requirement of the retail sale price per kg. not exceeding Rs. 100/- is not satisfied. Based on these facts, this Court observed that if the exemption was unconditional, then the assessee could not insist on payment of duty on exempted goods and, after that, insist on credit for the same. 27. The whole basis of reasoning in the case of Mahindra and Mahindra (supra) was that the exported goods were unconditionally exempted by notification, which is not so in the case before us. This Court also observed in the case of Mahindra and Mahindra (supra) that the assessee did not attempt to pay duty on the parts cleared for home consumption but paid duty on the goods exported, although the nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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