Custom, Excise & Service Tax TribunalHishine Inks Pvt Ltd vs Valsad on 2 November, 20181|Page                                                                       E/10314/2016-DB


        In The Customs, Excise & Service Tax Appellate Tribunal
                   West Zonal Bench At Ahmedabad


                           Appeal No. E/10314/2016-DB
  [Arising out of OIO-VLD-EXCUS-000-COM-0009-15-16 dated 30/12/2015 passed by the Commissioner of
                           Central Excise, Customs and Service Tax-Valsad]




M/s. Hishine Inks Pvt Ltd                                                        Appellant


Vs

C.C.E. & S.T -Valsad                                                             RespondentRepresented by:For Appellant: Shri.Willingdon Christian (Advocate)
For Respondent: Shri. L. Patra(A.R.)

CORAM:HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)
HON'BLE MR. RAJU, MEMBER (TECHNICAL)


                                                               Date of Hearing: 01.10.2018
                                                              Date of Decision:02.11.2018Final Order No. A /               12547         /2018Per: Ramesh Nair


      Brief facts of the case are that the appellant were sanctioned rebate

claims Vide 32 orders in original for total amount of Rs. 1,48,53,400/- in

respect of Excise duty paid on indigenous raw-material namely, Dyes,

Solvent, and Packaging material used in the manufacture of export goods.The rebate claim was sanctioned under Rule 18 read with Notification No.

21/2004-CE (NT) dated 6.9.2004. Consequently, show cause notice dated

09.05.2014 came to be issued proposing to recover the aforesaid rebate

amount underSection 11Aof the Central Excise Act, 1944, on the ground

that rebate of duty paid on materials/inputs used in the manufacture of

resultant export products under advance licence is not allowable /admissible

as per Condition No. (viii) of the Customs Notification No.. 96/2009-Cus. By2|Page                                                  E/10314/2016-DB


the impugned order, Ld. Commissioner has confirmed the demand for

recovery of rebate along with interest under Section 11AB/11AA and

imposed equal amount of penalty under Section 11AC. Being aggrieved by

the said impugned order appellant filed the present appeal.2.   Shri. Willingdon Christian, Ld. Counsel appearing on behalf of the

appellant submits that firstly, the subject Condition No.(viii) of the said

Customs Notification No. 96/2009-Cus is    not applicable to the appellant's

case, as the appellant had not availed export rebate in respect of materials

which they had imported duty free under the Notification No. 96/2009-Cus.

He further submits that the subject Notification No. 96/2009-Cus is only for

the sole purpose for allowing the benefit of exemption from payment of

Customs duty on imports against advance authorization. The benefit of this

Notification was availed by the appellant in respect of two imported raw

materials, namely, Resin and Additives. Even if, the alleged contravention of

Condition No.(viii) of the Notification No. 96/2009-Cus       is to be held in

favour of the Revenue, then also the legal remedy lies is to disallowing or

take back such benefit of exemption from payment of Customs duty availed

in respect of the said two imported raw materials. He submits the rebate

sanctioned under Rule 18 of Central Excise Rules, 2002 and Central Excise

Notification No. 21/2004-CE(NT) issued was under independent provision for

rebate which does not carry any condition to the effect that any violation of

Notification No. 96/2009-Cus is made then rebate will not be granted,

therefore, importing the contravention of different Notification No. 96/2009-

Cus for disallowing the rebate claim under Rule 18 is without authority of

law. He submits that the sanction of rebate is      in respect of three raw

materials was on the basis of valid permission granted by the jurisdictional

Deputy Commissioner who after verifying factual position of the nature of

raw material, use in the finished goods and input output ratio granted the3|Page                                                   E/10314/2016-DB


permission and on that basis rebate claim was sanctioned. He submits that

the permission order holds the field even today, as it has not been

challenged before nor set aside by, in appropriate Appellate Authority.

Consequently, in view of the said permission order having attained finality,

the impugned order cannot sustain being illegal, without jurisdiction and

beyond authority of law. He further submits that the whole exercise in this

case is Revenue neutral. Even by the stretch of imagination, the appellant is

hold to be not entitled to avail export rebate, they would be otherwise

entitled to claim the refund of the Excise duty paid on such indigenously

procured raw-materials in terms of Rule 5 of Cenvate Credit Rules, 2004. He

further submits that the show cause notice dated 09.05.2014 is partly time

barred under Section 11A. He also submits that as against the total 32

orders in original for granting rebate, the department has so far filed appeals

against only 15 orders. He invited our attention to order in appeal No. DMN-

EXCUS-000-APP-2010      to   224-13-14    dated   01.11.2013   reversing   the

sanction of 15 rebate claims. For the remaining 17 rebate claims, the

Department has not filed any appeals against the orders in original

sanctioning the 17 rebate claims. Therefore, in matter of such 17 rebate

claims for recovery of rebate claims, the impugned order is not sustainable

in law as it amounts to review of orders of Deputy Commissioner by the

Commissioner, which is not permissible in law. In respect of this above

submissions, he placed reliance on the following judgments.Spentex Industries Ltd. Vs. CCE-2015-TIOL-239-SCArvind Mills Ltd. Vs. CCE-2008(240) ELT 613 (T)

       Mardia Chemicals Ltd. Vs. CCE-2006(199) ELT 110 (T)

       National Tools (Export) Vs. UOI-2017 (348) ELT 638 (Raj.)

          Hi Speed Offsets Vs. CCE-2014 (304) ELT 3 (Del)4|Page                                                               E/10314/2016-DB


      Rajguru Enterprises Pvt. Ltd. Vs. CC (Export)-2011 (266) ELT 286

          (Export)

      Bhagwati Gases Ltd. Vs. CCe-2008 (226) ELT 478 (T)

      Coastal Gases & Chemicasl Pvt Ltd. Vs. CCE-1988(33) ELT 437 (T)

         CCE Vs. Maharashtra State Bureau of Test Book                       Production &

          Curriculum Research-2015 (39) STR 235 (T)

      Wimco Limited Vs. CCE1986 (26) ELT 877 (T)

      Zenith Spinners Vs. UOI-2015(326) ELT 97 (Guj.)CCE Vs. Ineos ABS Limited-2010 (254) ELT 628 (Guj.), 2011

          (267) ELT A155 (SC).3.   Shri. L. Patra, Ld. Assistant Commissioner (AR) appearing on behalf of

the Revenue reiterates the findings of the impugned order.4.   We have carefully considered the submissions made by both the sides

and perused the records, we find that in the facts of the present case the

adjudicating authority has passed recovery order of sanctioned rebate claim

which were sanctioned under Rule 18 read with Notification No. 21/2004-CE

(NT). The ground for recovery of rebate claim is that the appellant have

violated the conditions of (Viii) Customs Notification No. 96/2009-Cus. In

ordered   to   understand       whether      there    is   any    contravention       of   the

Notifications and if yes, whether said contraventions will affect the eligibility

of rebate to the appellant, we reproduced the Rule 18.18. Rebate of duty.-"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
      fulfillment of such procedure, as may be specified in the notification.Explanation. - For the purposes of this rule, "export", with its
      grammatical variations and cognate expressions, means taking goods out of
      India to a place outside India and includes shipment of goods as provision or
      stores for use on board a ship proceeding to a foreign port or supplied to a
      foreign going aircraf"5|Page                                                           E/10314/2016-DB




            Notification No. 21/2004-CE (NT) dated 6.9.2004 ,


  "Rebate of duty on excisable goods used in manufacture/ processing of
  export goods -- Procedure -- Notification No. 41/2001-C.E. (N.T.)
  superseded

  In exercise of the powers conferred by of rule 18 of the Central Excise
  Rules, 2002 and in supersession of the Ministry of Finance, Department of
  Revenue, notification No. 41/2001-Central Excise (N.T.), dated the 26th
  June, 2001 [G.S.R. 470(E) dated the 26th June, 2001], the Central
  Government hereby, directs that rebate of whole of the duty paid on
  excisable goods (hereinafter referred to as „materials‟) used in the
  manufacture or processing of export goods shall, on their exportation out
  of India, to any country except Nepal and Bhutan, be paid subject to the
  conditions and the procedure specified hereinafter :-(1)Filing of declaration. - The manufacturer or processor shall file a
  declaration with the Assistant Commissioner of Central Excise or the
  Deputy Commissioner of Central Excise having jurisdiction over the
  factory of manufacture describing the finished goods proposed to be
  manufactured or processed along with their rate of duty leviable and
  manufacturing/processing formula with particular reference to quantity or
  proportion in which the materials are actually used as well as the quality.The declaration shall also contain the tariff classification, rate of duty paid
  or payable on the materials so used, both in words and figures, in relation
  to the finished goods to be exported.(2)Verification of Input-output ratio. - The Assistant Commissioner of
  Central Excise or the Deputy Commissioner of Central Excise shall verify
  the correctness of the ratio of input and output mentioned in the
  declaration filed before commencement of export of such goods, if
  necessary, by calling for samples of finished goods or by inspecting such
  goods in the factory of manufacture or process. If, after such verification,
  the Assistant Commissioner of Central Excise or the Deputy
  Commissioner of Central Excise is also satisfied that there is no likelihood
  of evasion of duty, he may grant permission to the applicant for
  manufacture or processing and export of finished goods.

  (3)Procurement of material. - The manufacturer or processor shall
  obtain the materials to be utilised in the manufacture of the finished goods
  intended for export directly from the registered factory in which such
  goods are produced, accompanied by an invoice under rule 11 of the
  Central Excise Rules, 2002 :Provided that the manufacturer or processor may procure materials from
  dealers registered for the purposes of the CENVAT Credit Rules, 2002
  under invoices issued by such dealers.(4)Removal of materials or partially processed material for
  processing. - The Assistant Commissioner of Central Excise or the
  Deputy Commissioner of Central Excise may permit a manufacturer to
  remove the materials as such or after the said materials have been
  partially processed during the course of manufacture or processing of
  finished goods to a place outside the factory -6|Page                                                            E/10314/2016-DB


  (a)      for the purposes of test, repairs, refining, reconditioning or carryingout any other operation necessary for the manufacture of the finished
  goods and return the same to his factory without payment of duty for
  further use in the manufacture of finished goods or remove the same
  without payment of duty in bond for export, provided that the waste, if any,
  arising in the course of such operation is also returned to the said factory
  of the manufacture or process; or(b)     for the purpose of manufacture of intermediate products necessary
  for the manufacture or processing of finished goods and return the said
  intermediate products to his factory for further use in the manufacture or
  process of finished goods without payment of duty or remove the same,
  without payment of duty for export, provided that the waste, if any, arising
  in the course of such operation is also returned to the factory of
  manufacturer or processor;(c)    any waste arising from the processing of materials may be
  removed on payment of duty as if such waste is manufactured or
  processed in the factory of the manufacturer or processor.(5)Procedure for export. - The goods shall be exported on the
  application in Form A.R.E. 2 specified in the Annexure to this notification
  and the procedures specified in Ministry of Finance (Department of
  Revenue) notification No.19/2004-Central Excise (N.T.), dated the 6th
  September, 2004 or in notification No. 42/2001-Central Excise (N.T.),
  dated the 26th June, 2001 shall be followed.(6)Presentation of claim of rebate. - The claim for rebate of duty paid
  on materials used in the manufacture or processing of goods shall be
  lodged only with the Assistant Commissioner of Central Excise or Deputy
  Commissioner of Central Excise having jurisdiction of the place approved
  for manufacture or processing of such export goods.Explanation. - "duty" means for the purposes of this notification, duties of
  excise collected under the following enactment, namely :-(a)     the Central Excise Act, 1944 (1 of 1944);

  (b)    the Additional Duties of Excise (Goods of Special Importance) Act,
  1957 (58 of 1957);

  (c)    the Additional Duties of Excise (Textiles and Textile Articles) Act,
  1978 (40 of 1978);

  (d)    the National Calamity Contingent duty leviable under section 136 oftheFinance Act, 2001(14 of 2001), as amended bySection 169of the
  Finance Act, 2003 (32 of 2003) and further amended bySection 3of the
  Finance Act, 2004 (13 of 2004);(e)     special excise duty collected under aFinance Act;(f)     additional duty of excise as levied undersection 157of the
  Finance Act, 2003 (32 of 2003);(g) Education Cess on excisable goods as levied under clause 81 read
  with clause 83 of the Finance (No. 2) Bill, 2004.7|Page                                                        E/10314/2016-DB


                                                                 Annexure

  ARE 2 No.______________Original (White)/Duplicate (Buff)/Triplicate (Pink)

  Quadruplicate (Green)/Quintuplicate (Blue)

  Form A.R.E. 2

  Combined application for removal of goods for export under claim for
  rebate of duty paid on excisable materials used in the manufacture and
  packing of such goods and removal of dutiable excisable goods for export
  under claim for rebate of finished stage Central Excise Duty or under bond
  without payment of finished stage Central Excise Duty leviable on export
  goods.To

  The Superintendent of Central Excise,

  (Address)

  ___________________ (full postal address)

  Particulars of the Assistant Commissioner of Central Excise or the Deputy
  Commissioner of Central Excise from whom rebate shall be claimed/with
  whom bond is executed and his complete postal address
  __________________. 1.I/We ______________ of ________________ propose to export the under
  mentioned goods (details of which are given in Table 1 below) to
  ____________________ (country of destination) by *air/sea/land/post
  parcel* under claim for rebate of duty paid on excisable materials used in
  the manufacture and packing of such goods. 2.

  *The finished goods being exported are not dutiable.   3.

  or

  We intended to claim the rebate of Central Excise Duty paid on clearances
  of goods for export under notification No. 19/2004-Central Excise (N.T.),
  dated the 6th September, 2004 issued under Rule 18 of Central Excise
  Rules, 2002.or

  The export goods are intended to be cleared without payment of Central
  Excise Duty under notification No. 42/2001-Central Excise (N.T.), dated
  the 26th June, 2001 issued under Rule 19 of Central Excise (No. 2) Rules,
  2001.TABLE 1
 8|Page                                                                                         E/10314/2016-DB




      (Details of goods to be exported)

S1.   Descrip     Marks       Gro         Gross     Descri      Val    Finished       Invoi    Bond             Amou     Rem
No.   tion        and         ss          Weig      ption       -ue    Stage          ce       /under           nt of    arks
      Of pack     Nos.        Wei         ht        of                 Central        No.      taking           Rebat
      ages        No.pac      ght         And       finish             Excise         and      execut           e
                  k                       quan      ed                 duty           date     ed               claime
                  ages                    tity      goods                                      Under            d
                                          of                                                   rule 19          under
                                          good                                                 (if any)         Rules                                                                     18Rate Amt
(1)   (2)         (3)         (4)         (5)       (6)         (7)    (8)  (9)       (10)     (11)             (12)     (13)




      *Strike out portion not applicable**Quantity of goods to be furnished in units of sale where it is different
      than weight.#Write NA where exports are under bond/letter of undertaking in terms of
      Rule 19 or where goods are not chargeable to duty.

      TABLE 2

      Details of duty paid on excisable Materials and Packing materials used in
      manufacture of export goods for which rebate under notification
      _________ dated _____ is being claimed

S1.   Nam       Cent    Uni         Qty.          Na      Inv    Assessa     Rate       Dut Total                  Rebate       R
No    e/des     ral     t           used          me      oic    ble         of         y    Wastag               admissi       e
.     -         Exci                              of      e      Value/      Centr      Am es                     ble           m
      cripti    se                                Su      No     Unit        al         t.                        under         ar
      on of     Tarif                             ppl     .      (Rs.)       Excis      per                       rule 18       ks
      mate      f                                 ier     an                 e duty     unit                      (Rs.)
      rials/    Sub-                                      d                             (Rs)
      packi     head                                      Va
      ng        ing                                       lue
      with                                                /
      techn                                               Un
      ical                                                it
      speci                                               (R
      ficati                                              s.)
      on/
      Quan
      tity
                                                                                                Re        Irr
                                                                                                co        ec
                                                                                                ver       ov
                                                                                                abl       er
                                                                                                e         ab
                                                                                                          le
(1)   (2)       (3)     (4)         (5)           (6)     (7)    (8)   (9)   (10)       (11)    (12)              (13)          (14)9|Page                                                       E/10314/2016-DB




  Declaration :(a)      We hereby certify that we have not availed facility of CENVAT
  credit under CENVAT Credit Rules, 2002.(b)      We hereby declare that the export is not in discharge of export
  obligation under a Value based Advance License issued prior to 31-3-95.(c)     We hereby declare that the materials on which input stage rebate
  in claimed are not sought to be imported under a Quantity Based Advance
  License issued prior to 31-3-95.(d)     We further declare that we shall not claim any Drawback on export
  of the consignment covered under this application.(e)      I/We hereby declare that the above particulars are true and
  correctly stated.(f)     We have been granted permission by Assistant Commissioner of
  Central Excise or Deputy Commissioner of Central Excise Vide C.No.
  __________ date __________ for working under Notification No. 21/2004-Central Excise (N.T.), dated the 6th September, 2004.

  Time of Removal __________________

  Signature of owner or his authorised agent with date

  Name in Block Letters & Designation

  SEAL

  Note 1 : The A.R.E. 2 should be submitted by the manufacturer at least 24
  hours before intended removal of goods for export, to the Superintendent
  of Central Excise.Note 2 : A running serial no. of the factory starting with one in every
  financial year should be allotted to every A.R.E. 2.

  FOR DEPARTMENT USE

  PART A

  Certification by the Central Excise Officer

  Certified that   1.*duty has been paid on the goods described above or duty is payable as
  recorded at entry number___ in Daily Stock Account.

  or

  *the owner has entered into B-1 bond No ____________ /given an
  Undertaking ______under Rule 19 of Central Excise Rules, 2002 with the
  ____________________________ or *the finished goods being exported
  are not dutiable.10 | P a g e                                                        E/10314/2016-DB


     Certified that I have opened and examined the packages No.
     ___________________ and found that the particulars stated and the
     description of goods given overleaf read with the invoice and the packing
     list (if any) correct *[and that all the packages have been stuffed in the
     container No. _______________ with Marks ________________]*and the
     same has been sealed with Central Excise Seal/*One Time Seal (OST)
     No. ________________ 2.I have verified with the records, the declaration of the manufacture given
     at Sl. No. 3 overleaf regarding non-availment of credit under CENVAT
     Credit Rules, 2002 and found it to be true. 3.Certified that I have drawn three representative samples from the
     consignment and have handed over two sets thereof duty sealed to the
     manufacturer/his authorised representative (wherever feasible). 4.

     Certified that the material consumption as indicated in Table 2 overleaf are
     in accordance with the declaration No. ________ filed by ________ on
     __________ 5.Place : __________________

     Date : __________________

      Signature                          Signature
      (Name in Block                     (Name in Block
      Letters)                           Letters)
      Superintendent of                  Inspector of Central
      Central Excise                     Excise

     *Strike out inapplicable portionsNote 3 : The details given in Table 2 may be verified by the
     Superintendent of Central Excise subsequent to clearances. For this
     purpose, a detailed verification report may be submitted by the
     Superintendent to the Assistant/Deputy Commissioner of Central Excise
     along with Triplicate copy of A.R.E. - 2.Note 4 : The original, duplicate and Quintuplicate shall be returned to the
     manufacturer for presenting to the Customs Officer.

     PART B

     Certification by the Officer of Customs

     Certified that I have examined the consignment described overleaf and the
     seals on the packages were found intact and I have satisfied myself that
     particulars of the consignment are as specified overleaf except for the
     shortages mentioned below : 1.___________________________________________________________
     _____

     Certified that the exports are not under Duty Drawback Scheme. It is
     further certified that exports are not in discharge of export obligation under
     Value Based Advance License or a Quantity Based Advance License
     issued before 31-3-95. 2.11 | P a g e                                                       E/10314/2016-DB


     Certified that all copies of Shipping Bill/Bill of export contain endorsement
     of A.R.E. 2 No. in the space provided for indicating ARE 1. 3.

     Certified that the consignment was shipped under my supervision under
     *Shipping Bill No./Bill of Export No. ____________ dated
     _______________        which    left  for   _________________      on
     _________________ which passed the frontier on ____________ 4.

     Duplicate copy of A.R.E. 2 Forwarded to Assistant/Deputy Commissioner
     of Central Excise ............. on ...............

     Place :Date :Signature

     (Name and designation of the Customs Officer in Block letters)

     (Seal)

     Note 5 : The customs shall send the duplicate to the address given at Sl.No. 1 overleaf and handover original and quintuplicate to the exporter.

     PART C*

     Rebate Sanction Order Under rule 18(1)

     (On Original, Duplicate and Triplicate)

     Refund Order No. ______________ dated ______________ Rebate of
     Rs. ___________ (Rupees _____________ sanctioned vide cheque No.
     ___________ dated ____________

     Place ______________

     Date ______________

     Assistant/Deputy Commissioner of Central Excise

     PART D

     Rebate Sanction Order under rule 18(2)

     (On Original, Duplicate and Triplicate )

     Refund Order No. _______________ dated ______________________
     Rebate      of      Rs.     ____________________      (Rupees
     ________________________________ sanctioned vide cheque No.
     ___________________ dated __________________

     Place __________________

     Date _______________

     Assistant/Deputy Commissioner of Central Excise

     Strike out inapplicable portions".12 | P a g e                                                       E/10314/2016-DB




                  Notification No. 96/2009-Cus dated 11.9.2009 as under:-"Advance authorisation -- Exemption to imports thereunder

          In exercise of the powers conferred by sub-section (1) ofsection 25of
          the Customs Act, 1962 (52 of 1962), the Central Government, being
          satisfied that it is necessary in the public interest so to do, hereby
          exempts materials imported into India against an Advance
          Authorisation issued in terms of paragraph 4.1.3 of the Foreign Trade
          Policy (hereinafter referred to as the said authorisation) from the whole
          of the duty of customs leviable thereon which is specified in theFirst
          Schedule to the Customs Tariff Act, 1975(51 of 1975) and from the
          whole of the additional duty, safeguard duty and anti-dumping duty
          leviable thereon, respectively, undersections 3, 8B and 9A of the saidCustoms Tariff Act, subject to the following conditions, namely :-(i)   that the said authorisation is produced before the proper officer
          of customs at the time of clearance for debit;(ii)     that the said authorisation bears,-(a)  the name and address of the importer and the supporting
          manufacturer in cases where the authorisation has been issued to a
          merchant exporter; and(b) the shipping bill number(s) and date(s) and description, quantity
          and value of exports of the resultant product in cases where import
          takes place after fulfilment of export obligation; or(c)    the description and other specifications where applicable of the
          imported materials and the description, quantity and value of exports of
          the resultant product in cases where import takes place before
          fulfilment of export obligation;(iii) that the materials imported correspond to the description and
          other specifications where applicable mentioned in the authorisation
          and the value and quantity thereof are within the limits specified in the
          said authorisation;(iv) that in respect of imports made before the discharge of export
          obligation, the importer at the time of clearance of the imported
          materials executes a bond with such surety or security and in such
          form and for such sum as may be specified by the Deputy
          Commissioner of Customs or Assistant Commissioner of Customs, as
          the case may be, binding himself to pay on demand an amount equal
          to the duty leviable, but for the exemption contained herein, on the
          imported materials in respect of which the conditions specified in this
          notification are not complied with, together with interest at the rate of
          fifteen percent per annum from the date of clearance of the said
          materials;(v)   that in respect of imports made after the discharge of export
          obligation, if facility of CENVAT Credit under CENVAT Credit Rules,
          2004 has been availed, then the importer shall, at the time of clearance13 | P a g e                                                       E/10314/2016-DB


          of the imported materials furnish a bond to the Deputy Commissioner
          of Customs or Assistant Commissioner of Customs, as the case may
          be, binding himself, to use the imported materials in his factory or in
          the factory of his supporting manufacturer for the manufacture of
          dutiable goods and to submit a certificate, from the jurisdictional
          Central Excise officer or from a specified chartered accountant within
          six months from the date of clearance of the said materials, that the
          imported materials have been so used :Provided further that if the importer pays additional duty of customs
          leviable on the imported materials but for the exemption contained
          herein, then the imported materials may be cleared without furnishing a
          bond specified in this condition and the additional duty of customs so
          paid shall be eligible for availing CENVAT Credit under the CENVAT
          Credit Rules, 2004;(vi) that in respect of imports made after the discharge of export
          obligation in full, and if facility under rule 18 (rebate of duty paid on
          materials used in the manufacture of resultant product) or sub-rule (2)
          of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under
          CENVAT Credit Rules, 2004 has not been availed and the importer
          furnishes proof to this effect to the satisfaction of the Deputy
          Commissioner of Customs or the Assistant Commissioner of Customs
          as the case may be, then the imported materials may be cleared
          without furnishing a bond specified in condition (v);(vii) that the imports and exports are undertaken through seaports at
          Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar,
          Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla,
          Kolkata,     Krishnapatnam,    Magdalla,    Mangalore,    Marmagoa,
          Muldwarka, Mumbai, Mundhra, Nagapattinam, Nhava Sheva, Okha,
          Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and
          Vadinar or through any of the airports at Ahmedabad, Bangalore,
          Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi,
          Hyderabad, Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai,
          Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum and Varanasi or
          through any of the Inland Container Depots at Agra, Ahmedabad,
          Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi,
          Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chheharata (Amritsar),
          Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad (Wanjarwadi and
          Maliwada), Delhi, Dighi (Pune), Durgapur (Export Promotion Industrial
          Park), Faridabad, Garhi Harsaru, Gauhati, Guntur, Hyderabad, Jaipur,
          Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur, Kota, Kundli, Loni
          (District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep
          (District Raisen), Miraj, Moradabad, Nagpur, Nasik, Pimpri (Pune),
          Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur(Nainital),
          Salem, Singanalur, Surat, Surajpur, Tirupur, Tuticorin, Udaipur,
          Vadodara, Varanasi, , Waluj (Aurangabad) or through the Land
          Customs Station at Agartala, Amritsar Rail Cargo, Attari Road,
          Changrabandha, Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur,
          Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul,
          Singhabad and Sutarkhandi or a Special Economic Zone notified undersection 4of the Special Economic Zones Act, 2005 (28 of 2005) :Provided that the Commissioner of Customs may with in the
          jurisdiction , by special order, or by a Public Notice, and subject to
          such conditions as may be specified by him, permits import and export14 | P a g e                                                        E/10314/2016-DB


          from any other seaport/airport/inland container depot or through any
          land customs station;(viii) that the export obligation as specified in the said authorization
          (both in value and quantity terms) is discharged within the period
          specified in the said authorization or within such extended period as
          may be granted by the Regional Authority by exporting resultant
          products, manufactured in India which are specified in the said
          authorization and in respect of which facility under rule 18 (rebate of
          duty paid on materials used in the manufacture of resultant product) or
          sub-rule (2) of rule 19 of the Central Excise Rules, 2002 has not been
          availed :Provided that an Advance Intermediate authorization holder shall
          discharge export obligation by supplying the resultant products to
          exporter in terms of paragraph 4.1.3 (ii) of the Foreign Trade Policy;(ix) that the importer produces evidence of discharge of export
          obligation to the satisfaction of the Deputy Commissioner of Customs
          or Assistant Commissioner of Customs, as the case may be, within a
          period of sixty days of the expiry of period allowed for fulfilment of
          export obligation, or within such extended period as the said Deputy
          Commissioner of Customs or Assistant Commissioner of Customs, as
          the case may be, may allow;(x)   that the said authorisation shall not be transferred and the said
          materials shall not be transferred or sold :Provided that the said materials may be transferred to a job worker for
          processing subject to complying with the conditions specified in the
          relevant Central Excise notifications permitting transfer of materials for
          job work :Provided further that, no such transfer for purposes of job work shall be
          effected to the units located in areas eligible for area based
          exemptions from the levy of excise duty in terms of notification Nos.
          49/03-C.E. and 50/03-C.E. both dated 10th June, 2003, 32/99-C.E.,
          dated 8th July, 1999, 33/99-C.E., dated 8th July, 1999, 8/04-C.E.,
          dated 21st January, 2004, 20/07-C.E. dated 25th April, 2007, 56/02-
          C.E., dated 14th November, 2002, 57/02-C.E. dated 14th November,
          2002, 71/03-C.E., dated 9th September, 2003, 56/03-C.E. dated 25th
          June, 2003 and 39/01-C.E., dated 31st July, 2001;(xi) that in relation to the said authorisation issued to a merchant
          exporter, any bond required to be executed by the importer in terms of
          this notification shall be executed jointly by the merchant exporter and
          the supporting manufacturer binding themselves jointly and severally to
          comply with the conditions specified in this notification.2. Where the materials are found defective or unfit for use, the said
          materials may be re-exported back to the foreign supplier within six
          months from the date of clearance of the said material or such
          extended period not exceeding a further period of six months as the
          Commissioner of Customs may allow :Provided that at the time of re-export the materials are identified to the
          satisfaction of the Deputy Commissioner of Customs or Assistant
 15 | P a g e                                                          E/10314/2016-DB


          Commissioner of Customs, as the case may be, as the materials which
          were imported.3. Notwithstanding anything contained in this notification, the actual
          user condition specified in condition numbers (viii) and (x) shall not be
          applicable in respect of authorisation issued for import of raw sugar for
          imports made from the 17th February, 2009 till 30th September, 2009
          and the export obligation may also be fulfilled by procuring white sugar
          from any other factory with effect from the 17th February, 2009.

          Explanation, - For the purposes of this notification,-(i)   "Dutiable goods" means excisable goods which are not exempt
          from central excise duty and which are not chargeable to „nil‟ rate of
          central excise duty;(ii) "Foreign Trade Policy" means the Foreign Trade Policy 2009-
          2014, published by the Government of India in the Ministry of
          Commerce and Industry vide notification No. 1/2009-2014, dated the
          27th August 2009 as amended from time to time;(iii) "Licensing Authority or Regional Authority" means the Director
          General of Foreign Trade appointed undersection 6of the Foreign
          Trade (Development and Regulation) Act, 1992 (22 of 1992) or an
          officer authorized by him to grant a licence under the said Act;(iv) "Manufacture" has the same meaning as assigned to it in
          paragraph 9.37 of the Foreign Trade Policy;(v)   "Materials" means-(a)     raw materials, components, intermediates, consumables,
          catalysts and parts which are required for manufacture of resultant
          product;(b) mandatory spares within a value limit of ten per cent. of the value
          of the licence which are required to be exported along with the
          resultant product;(c)   fuel required for manufacture of resultant product;(d)   packaging materials required for packing of resultant product;(vi) "Specified Chartered Accountant" means a statutory auditor or a
          Chartered Accountant who certifies the importer‟s financial records
          under theCompanies Act, 1956(1 of 1956) or the Sales Tax/Value
          Added Tax Actof the State Government or theIncome Tax Act, 1961(43 of 1961)".From the reading of above Rule 18 of the Central Excise Rule, 2002

 and Notification No. 21/2004-CE (NT) issued there under. We find that
 16 | P a g e                                              E/10314/2016-DB


 there is no conditions in the said Notification that if any Contravention of

 the condition of Notification No. 96/2009-Cus is made then the assessee is

 not be eligible for rebate of duty paid on raw material used in the export

 goods in terms of Rule 18 and Notification issued there under. We find that

 the Rule 18 Notification No. 29/2004-CE is self contained statutory provision

 for granting rebate of duty paid on raw material used in the export goods

 subject to certain procedure /permission. We find that the appellant have

 scrupulously followed the procedure and also obtained the permission, only

 after compliance thereof the rebate was sanctioned, since, in view of this

 position, it is not permissible in law to import any extraneous conditions of

 some different Notification into the provision of rebate and rebate cannot be

 rejected for that reason. Similarly, by reading the Notification No. 96/2009-

 Cus there is no condition with reference to the rebate provision of Rule 18

 and Notification No. 21/2004-CE. From the facts of the case it is undisputed

 that even by stretch of imagination it is interpreted that due to

 contravention of the condition of Notification No. 96/2009-Cus the rebate

 cannot be sanctioned. We find that the appellant have claimed the rebate

 only in respect of indigenously procured raw material on which no benefit of

 Notification No. 96/2009-Cus was availed, therefore, on this fact even the

 allegation in the show cause notice even though it is not sustainable as

 irrelevant with the sanction of rebate claim under Rule 18. Therefore, on

 both counts the adjudication authority has gravely arred in passing

 impugned order by which recovery of the sanctioned rebate was confirmed.

 The order of the adjudicating authority is without authority of law. As there

 is no provision in the statute to recovery the rebate claims sanctioned under

 Rule 18 for violation of condition of Notification No. 96/2009-Cus.5.     As per our above discussion, we are of the considered view that

 appellant was legally entitled for rebate claim even if there is any violation
 17 | P a g e                                                 E/10314/2016-DB


 of conditions of Notification No. 96/2009-Cus if any, therefore, the order for

 recovery of the said rebate claim is absolutely illegal and not tenable.6.      Accordingly, the impugned order is set aside, appeal is allowed.(Pronounced in the open court on   02.11.2018 )




    (Raju)                                             (Ramesh Nair)
Member (Technical)                                    Member (Judicial)

Prachi