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TMI Blog2022 (11) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... s were cleared on payment of the duty which has been sought to be rebated after the export of the said goods. The facts that the goods cleared were exported is enough to allow the claim of rebate in the favour of the appellants. Admittedly there was misdeclaration of the description of the goods on the export documents to the effect that the goods were declared as Platinum/ Palladium supported catalyst instead of Ash and Residue . This misdeclaration resulted in appellants claiming certain benefits under the Advance License DEEC Scheme. As per this scheme against the exports made appellant obtained Advance Licenses for import of duty free precious metals, and imported duty free material against these licenses during the period from December 2003 to June 2008. Extended period of limitation - HELD THAT:- All the facts were in the knowledge of the department and the goods were cleared for export in manner as provided by the Notification after due examination. In such a situation there cannot be any justification for invocation of extended period of limitation for making this demand. Admissibility of the CENVAT Credit - HELD THAT:- There are no merits in the said arguments as that was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3815 11 00 and 3815 1210 of the First Schedule to the Central Excise Tariff Act, 1985. 2.2 Intelligence received, by the Officers of the Hqrs. Preventive Section of Central Excise, Belapur Commissionerate indicated that appellant were misutilising the Advance Licence Scheme by mis- declaring their export goods as Catalysts of Palladium and Platinum, thereby importing Platinum Sponge, Palladium Sponge, Acticarbone, Charcoal powder, Carbon powder, Sodium Clropall Solution, Pd.Chloride Solution and Chloroplatinic Acid Solution without payment of Customs Duty. Intelligence further indicated that they had obtained Advance Licences for import of the above items under DEEC Scheme of EXIM Policy 2002-2007 and 2004-2009 by availing exemption of Customs Duty under Notification Nos.43/02-Cus dated 19.4.2002 and 93/04-Cus dated 10.9.2004 for using the same in the manufacture and export of goods viz. Catalysts of Palladium and Platinum said to be manufactured out of imported/locally procured Palladium/Platinum sponge by adding necessary additives and also by processing spent catalyst received from various pharmaceutical companies. 2.3 Acting on the above intelligence, investigations were unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 25 of the Central Excise Rules, 2002. Therefore appellant were also liable for penal action under Rule 25 of the Central Excise Rules, 2002. 2.11 A show cause notice dated 30.08.2012 asking them to show-cause to the Commissioner of Central Excise, Belapur Commissionerate having office located at 1st Floor, CGO Complex, CBD Belapur, Navi Mumbai-400 614. as to why 1) the rebate of Central Excise duty amounting to Rs. 7,25,34,077/- (Rupees Seven crores twenty five lakhs thirty four thousand seventy seven only) as indicated at Annexure-B to the show cause notice, which was erroneously sanctioned by the said Assistant Commissioner to them, in terms of their rebate claims, should not be recovered from them, in terms of Section 11A(4)) of the Central Excise Act, 1944/erstwhile proviso to Section 11A(1) read with Rule 18 of the Central Excise Rules, 2002 read with the provisions contained in the said Notification No. 19/2004-CE(NT). 2) as to why penalty should not be imposed on them in terms of Section 11AC(a)/erstwhile Section 11AC of the Central Excise Act 1944 and, the interest at appropriate rates should not be recovered from them under Section 11AA/erstwhile Section 11AB of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46; As the demand cannot be sustained on merits and limitation there can be no question for imposition of fine and interest on the appellants. o Tirupati Udyog [2011 (272) ELT 209 (AP)] 3.3 Arguing for the revenue learned special counsel while reiterating the findings recorded in the impugned order submits: ➢ In case of Arun International [2015 (317) ELT 465 (T)] it has been observed that rebate of duty paid on goods can only be given as per the provisions of the Act and the rules made thereunder. Similar view has been expressed by the Hon'ble Punjab and Haryana High Court in case of Sarita Handa Exports 9P) Ltd [2015 (321) ELT 434 9P & H)]. In Uttam Steels {2015 9319) ELT 598 (SC) Hon'ble Supreme Court held that rebate of duty paid has to be give as per provisions of Rule 18 and Section 11 B of the Central excise Act, 1944. ➢ No rebate can be given of duties paid on non excisable goods or exempted goods as have been held in the case of Vanasthali Textiles Ind Ltd [2015 (3210 ELT 89 (raj)], Mahindra & Mahindra Ltd. [2015 (321) ELT 61 (Bom)], Inductotherm (I) Pvt Ltd [2012 (283) ELT 359 (Guj)] ➢ No CENVAT Credit could have been allowed on inputs not sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the internal records in the form of Assay Analysis Reports clearly establish that the good exported were "Ashes and Residues". I find that the Assay Analysis reports contained the Reference Lot No, the input material, the output material and the metal contents i.e. the quantity of precious metals in the said output material. On co- relating the Reference lot Nos. with the Batch Nos. appearing in the ARE1s, under which the impugned goods were exported, I find that the description of the goods pertaining to Batch Nos. mentioned in the ARE1s and the Assay Analysis reports differ significantly. The description mentioned in each of the 27 ARE1s were "Platinum/Palladium supported catalyst" ranging from 1.5% to 10%, whereas the description in the Assay Analysis Reports were "Ash and Residues". It is therefore evident that though the description of the goods mentioned in the 27ARE1s were "Platinum/Palladium supported catalyst", the goods actually exported were "Ash and residues". Shri. Sougata Goswami, Senior Officer- Metal Control and Shri. Amit Burman, General Manager (Process Catalysts) categorically admitted in their statements that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on goods. which were never exported Under Rule 18 what is rebated is the duty paid on the goods exported. In this case, it has been proved beyond doubt that the goods exported was not 'Palladium/Platinum supported catalysts'. The goods actually exported was 'Ash and Residues'. There was no export of the goods Palladium/Platinum supported catalysts as declared in the ARE1's shipping Bills. Hence, the duty said to have been paid on the goods which were not at all exported cannot be rebated. 31.1 In their submission, M/s JMCIPL stated that under Rule 18 of Central Excise Rules 2002, what is rebated is the duty paid. So, even if the goods were mis-declared, the duty paid was liable to be rebated. I do not agree with the argument put forth by M/s. JMCIPL. In this case M/s. JMCIPL had declared the goods as 'Palladium/Platinum supported catalysts" However, the goods exported were not Palladium/Platinum supported catalysts.. The goods actually exported were "Ash and Residues". M/s. JMCIPL cannot get rebate of the duty on the goods which were not exported. Hence, I hold that M/s. JMCIPL is not eligible for the rebate of duty paid on the goods &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metal content and not "Platinum/Palladium supported catalyst". It was only subsequent to 'the visit of the Preventive Officers and when the investigation was in progress that M/s. JMCIPL approached the Customs Department vide their letter dated 13.4.2011 and paid the Customs duty along with interest and 25% penalty amounting to Rs. 11.66 crores. Therefore, the contention of M/s. JMCIPL that they had found out the mis- declaration/misclassification of their export product at the time of internal review is an afterthought to mislead the department. I also find that M/s. JMCIPL were very well aware at the production stage itself that the batch nos. pertaining to the product exported were "Ash and residues", but with the deliberate and malafide intention to avail the benefit of import of duty free raw materials and to avail the benefit of rebate, mis- declared the export product as "Platinum/Palladium supported catalyst". So, the duty paid by them was not the duty payable on the Ash and Residues exported. This fact was suppressed as they have mis- declared the description of the goods. The rebate was sanctioned as if the duty was paid on the 'Palla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Daily Stock Register maintained by them which is a clear contravention of the provisions of Rule 10 of the Central Excise Rules, 2002 and as such M/s. JMCIPL are liable for penal action under Rule 25 of the Central Excise Rules, 2002 35. ….. 4.3 The basic principle which govern the export of the goods from one jurisdiction to another is that "goods are exported and not the taxes and levies on them made in the jurisdiction from where they are exported." This principle of the international Trade across the borders is essential not only to promote the exports but is fundamental, basic levy of indirect taxes and for making the export goods competitive in the international market. Indirect taxes such as Central excise duty with which we are concerned is tax on the consumption of the goods and should be levied to the taxes in the jurisdiction were they are being consumed. Admittedly the goods exported are not consumed in the jurisdiction of the country from where it is exported but is consumed in the jurisdiction were it where it imported, hence should be levied to taxes leviable in that jurisdiction. In case of Chhotabhai Jethabahi Patel & Co [1999 (110) ELT 118 (SC)] Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation.-"Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft. In terms of the rule 18, Central Government issued Notification No 19/2004-CE (NT) for prescribing the conditions and limitations along with the procedure for making the scheme envisaged under this rule operational. Notification 19/2004-CE (NT) inter alia provided as follows: "In exercise of the powers conferred by rule 18 of the Central Excise Rules, 2002 and in supersession of the Ministry of Finance, Department of Revenue, notification No. 40/2001- Central Excise (NT), dated the 26th June 2001,[G.S.R.469(E), dated the 26th June, 2001] in so far as it relates to export to the countries other than Nepal and Bhutan, the Central Government hereby directs that there shall be granted rebate of the whole of the duty paid on all excisable goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), exported t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uperintendent or Inspector of Central Excise having jurisdiction over the factory of production or manufacture or warehouse; v. The said Superintendent or Inspector of Central Excise shall verify the identity of goods mentioned in the application and the particulars of the duty paid or payable, and if found in order, shall seal each package or the container in the manner as may be specified by the Commissioner of Central Excise and endorse each copy of the application in token of having such examination done; vi. The said Superintendent or Inspector of Central Excise shall return the original and duplicate copies of application to the exporter; vii. The triplicate copy of application shall be - a. sent to the officer with whom rebate claim is to be filed, either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in official records, or b. sent to the Excise Rebate Audit Section at the place of export in case rebate is to be claimed by electronic declaration on Electronic Data Inter- change system of Customs; viii. The exporter may prepare quadruplicate copy of application for claiming any other export incentive. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appointed officer; xiv. The Commissioner of Customs or other duly appointed officer shall examine the consignments with the particulars as cited in the application and if he finds that the same are correct and exportable in accordance with the laws for the time being in force, shall allow export thereof and certify on the copies of the application that the goods have been duly exported citing the shipping bill number and date and other particulars of export: Provided that if the Superintendent or Inspector of Central Excise sealed packages or container at the place of dispatch, the officer of customs shall inspect the packages or container with reference to declarations in the application to satisfy himself about the exportability thereof and if the seals are found intact, he shall allow export. xv. The officer of customs shall return the original and quadruplicate (optional copy for exporter) copies of application to the exporter and forward the duplicate copy of application either by post or by handing over to the exporter in a tamper proof sealed cover to the officer specified in the application, from whom the exporter wants to claim rebate: Provided that where the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner. These rebate claims were allowed in their favour. There is no dispute that the goods which were cleared under the ARE-1's were not exported and diverted elsewhere. The facts as recorded in the order acknowledge the fact of actual shipment of these goods. It is also not in dispute that these goods were cleared on payment of the duty which has been sought to be rebated after the export of the said goods. In our view the facts that the goods cleared were exported is enough to allow the claim of rebate in the favour of the appellants. 4.5 Admittedly there was misdeclaration of the description of the goods on the export documents to the effect that the goods were declared as "Platinum/ Palladium supported catalyst" instead of "Ash and Residue". This misdeclaration resulted in appellants claiming certain benefits under the Advance License DEEC Scheme. As per this scheme against the exports made appellant obtained Advance Licenses for import of duty free precious metals, and imported duty free material against these licenses during the period from December 2003 to June 2008. Thereafter realizing their mistake they stopped importing the raw material against the export of ash and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like manner meaning thereby as prescribed by Rule 12, can be exported without payment of duty from warehouse or licensed factory, provided that export is made in accordance with the procedure set out in the relevant provisions of Chapter IX of these Rules and the owner enters into a bond in the proper form, with such surety or sufficient security under such conditions in the sum equivalent to that chargeable on the goods for the due arrival at the port of the export. And such bond shall not be discharged unless the goods are duly exported to the satisfaction of the Collector. It therefore, appears clear that Rules 12 and 13 deal with excisable goods which are exported from the country of their manufacture to outside countries. If the excisable goods are exported after payment of duty they may earn refund as per notification laid down by Rule 12. While if these excisable goods are found in bonded warehouse covered by bond to pay excisable duty payable thereon, in case they are exported as laid down by Rule 13 they may earn exemption from payment of duty in the same manner as laid down by Rule 12. Therefore, both these rules are complementary to each other and cover the same topic of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that therefore the amount paid by the assessee cannot be treated as duty paid so as to enable the manufacturer to claim rebate. But the said contention of the Revenue was repelled by the Rajasthan High Court on the ground that even in cases where the manufacturer pays duty which is not leviable, he may be entitled to claim refund of the same. Therefore, the Department may not be right in retaining the duty paid by the petitioner." 4.9 In case of Tata engineering and Locomotive Company [2018 (360) E.L.T. 607 (Bom.)] Hon'ble Bombay High Court has held as follows: 6. Rule 12 of the Central Excise Rules, 1944 reads as under :- "RULE 12. Rebate of duty on goods exported - (1) The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of duty paid on excisable goods, if exported outside India, to such extent, and subject to such safeguards, conditions and limitations as regards the class of goods, destination, mode of transport, and other allied matters as may be specified therein. Provided that if the Collector is satisfied that the goods have in fact been exported (he may, for reasons to be recorded in writing, allow), the whole or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates and hence Commissioner (Appeals) order in this case is contrary to stand taken by him in earlier order dated 14-7-2009. The applicant also submitted that Sr. No. 296 of the Notification No. 6/2002-C.E., dated 1-3-2002 as amended by Notification No. 23/2004-C.E., dated 9-7-2004 and entry No. 92 of Notification No. 6/2006-C.E., dated 1-3- 2006, which exempts the parts of tractors, is conditional in nature as it specify the condition that they are to be captively consumed in the manufacture of tractor and as such the entry not is absolute in nature. The applicant further submitted that in case the drawback is not allowed to them the duty paid on aggregates may be allowed to be re-credited. Government observes that the respondent Department in their counter reply have mainly stated that in the earlier case the issue before the Commissioner (Appeals) was the payment of interest on duty already paid by the applicant. The issue before the Commissioner (Appeals) was not the dutiability of the aggregates, but the interest on payment of duty. The applicants paid the duty on its own volition, and the same was not even agitated by them before the lower authorities and as such the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een dealt by the appellate authority and hence, applicants contention is not tenable" This decision is not on the issue of rebate claim in terms of Rule 18 of the Central Excise Rules, 2002 but is in the case of Fixation of Brand Rate and would not be applicable, to the facts of the present case. 4.11 Even if the it is assumed that appellant had paid the duty on ash and residue which was not required to be paid as the said goods were non excisable then also the amount of the duty paid needs to be refunded to the appellant as per the provisions of Section 11B of the Central Excise Act, 1944. However we are not concerned with that case as the rebate have been sanctioned by the departmental authorities in favour of appellant and we are concerned with the Show Cause Notice issued to the appellant under Section 11A of the Central Excise Act, 1944. Further we also note that all the facts were in the knowledge of the department and the goods were cleared for export in manner as provided by the Notification after due examination. In such a situation there cannot be any justification for invocation of extended period of limitation for making this demand. 4.12 During course of the argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... si judicial authority. The Apex Court in "Abdul Kuddus" reported in (2019) 6 SCC 604 has very succinctly laid down the law regarding impermissibility of collateral impeachment of orders passed by Quasi Judicial bodies. The relevant paragraphs of the Judgment is extracted as under :- "23. The procedure prescribed by the post 2012 amendment under the 1964 Order mandates compliance with the principles of natural justice. All the allegations and grounds are required to be served by the Tribunal in the form of a show-cause notice to the person who is alleged to be a foreigner [see para 60 in Sarbananda Sonowal (2) [Sarbananda Sonowal (2) v. Union of India, (2007) 1 SCC 174]]. Thereupon, the person has to be given a reasonable opportunity to file representation and also produce evidence. The Tribunal has been authorised to consider and allow prayer for production and examination of the witnesses which can be refused if found to be vexatious, or made with the intent to cause delay, etc. The evidence produced by the Superintendent of Police can also be recorded. The person concerned has to be heard before the Tribunal gives its opinion. The person concerned may appear in person or can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the order of the Registering Authority result in determination of rights/status under the statute and by an authority after a contest on the merits which would necessarily operate as a bar to subsequent proceedings before the same authority for redetermination of the same issue/question. This Court in Ujjam Bai v. State of U.P. [Ujjam Bai v. State of U.P, AIR 1962 SC 1621] has held that the principles of res judicata equally apply to quasi-judicial bodies. Whenever a judicial or quasi-judicial tribunal gives a finding on law or fact, its findings cannot be impeached collaterally or in a second round and are binding until reversed in appeal or by way of writ proceedings. The characteristic attribute of a judicial act or decision is that it binds, whether right or wrong. Thus, any error, either of fact or law, committed by such bodies cannot be controverted otherwise by way of an appeal or a writ unless the erroneous determination relates to the jurisdictional matter of that body. 25. In J.J. Merchant v. Shrinath Chaturvedi [J.J. Merchant v. Shrinath Chaturvedi, (2002) 6 SCC 635], when the Learned Counsel had pleaded that the National Consumer Disputes Redressal Commission canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal and it attained finality. 36. Thus, once the order of adjudication has been validly passed under Section 11B and a refund has been made on 5-11- 2015, the next question which crops up for consideration is as to whether Section 11A can be invoked thereafter. 37. As Section 11A(1)(a) uses the word "Central Excise Officer" who is empowered for recovery of any refund, Central Excise Officer is defined in Section 2(b) of the Act, to mean Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of Central Excise Department invested by Central Board of Excise and Customs constituted under Central Board of Revenue Act, 1963 with any of powers of a Central Excise Officer under the Act. Thus, an order of recovery can be passed under Section 11A by an Assistant Commissioner, as he happens to be a Central Excise Officer in terms of Clause (a) of sub-section (1) of Section 11A, though an application under sub-section (2) of Section 11B can be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-8-2017 was issued after more than two years from finalisation of assessment order dated 24-7-2015, and where there is change of opinion by issuance of show cause notice, writ petition is maintainable as held in Shahnaaz Ayurvedics (supra), Simplex Concrete Piles (supra) and Samsung India Electronics Pvt. Ltd. (supra). 43. As seen above that Section 35E and 11A operate in different fields and are invoked for different purposes, we are merely concerned in this case with the interplay between Sections 11A and 35E. We are also concerned with what happened in the form of an adjudication under Section 11B. What happens in a case wherein adjudication takes place under Section 11B and authorities do not take recourse available to them, whether after having allowed adjudication under Section 11B to attain finality, was there any remedy available to department at all under Section 11A to proceed. 44. This question was considered and decided in Eveready Industries (supra), wherein the Court held that two valuable rights, one in the form of right of appeal and another in form of order of refund, are now sought to be taken away indirectly by taking recourse to Section 11A. What cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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