Rajasthan High Court - Jodhpur
National Tools (Exports) vs The Dy. Commissioner, Central Excise ... on 24 May, 2024
Bench: Pushpendra Singh Bhati, Yogendra Kumar Purohit
[2024:RJ-JD:21780-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 3083/2019
National Tools (Exports), F-53 Mia Phase 1, Basni, At Present -
Sp 865/a, Boranada Phase Iv, Jodhpur (Raj). Through Its Partner
Mahendra Moondra S/o Shri S.l. Mundra , Aged 45 Years.
----Petitioner
Versus
1. The Dy. Commissioner, Central Excise And Service Tax,
Central Excise And Service Tax, 4 Narpat Niwas , Air Force
Road, Jodhpur.
2. The Commissioner (Appeals), Central Excise, Jaipur Ii,
New Central Revenue Building, Statue Circle, C Scheme,
Jaipur (Raj).
3. The Addl. Secretary, Government Of India, Ministry Of
Finance, Department Of Revenue, 14- Hudco Vishala
Building, B Wing, 6Th Floor, Bhikajicama Place, New Delhi
- 110-066.
----Respondents
For Petitioner(s) : Mr. Jitendra Maheshwari
For Respondent(s) : Mr. Kuldeep Vaishnav
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
Judgment
Reserved on 10/05/2024
Pronounced on 24/05/2024
Per Dr. Pushpendra Singh Bhati, J:
1. This writ petition under Article 226 of the Constitution of
India has been preferred claiming the following reliefs:
"The petitioner therefore respectfully prays that this
writ petition may kindly be allowed and:
(i) By an appropriate writ or direction, the order impugned
dated 06.12.2018 (Annexure-P/1) passed by Revisional
Authority may kindly be quashed and set aside;
[2024:RJ-JD:21780-DB] (2 of 8) [CW-3083/2019]
(ii) It may kindly be held that once the actual consumption
has been verified after following statutory
provisions/notifications SION norms cannot be applied in
determining the wastage.
(iii) By an appropriate writ or direction, the impugned order
dated 30.09.2016 (Annexure-P/10) passed by the appellate
authority may also be quashed.
(iv) By an appropriate writ or direction impugned OIO
No.80-86/2012 dated 30.04.2012 (Annexure-P/6) may also
be quashed.
(v) it may kindly be directed that the amount & interest
thereon, already paid by the petitioner in pursuance of the
impugned orders, be refunded to the petitioner with interest.
(vi) Any other appropriate order, which this Hon'ble Court
deems just and proper in the facts and circumstances of the
present case may kindly be passed.
(vii) Costs may kindly be awarded to the petitioner."
2. Brief facts of the case, as placed before this Court by learned
counsel for the petitioner, are that the petitioner filed rebate
claims for grant of rebate on duty paid on the material used in
manufacturing of export goods under Rule 18 of the Central Excise
Rules, 2002 (hereinafter referred to as 'Rules of 2002') read with
notification 21/04-CE (NT) dated 06.09.2004, as amended.
Thereafter, the original adjudicating authority sanctioned a rebate
of 7 exports made by the petitioner unit, against which, the
department filed an appeal before the Commissioner (Appeals),
and in the meantime, 7 SCN's all dated 14.11.2008 were issued;
the appeal was dismissed by the Commissioner (Appeals) vide OIA
No. 51-57 (DK) CE/JPR-II/2009 dated 03.02.2009.
2.1. Thereafter, the department filed a revision application before
the Joint Secretary, GOI, New Delhi against the aforesaid OIA and
[2024:RJ-JD:21780-DB] (3 of 8) [CW-3083/2019]
the same was decided vide order no.992/11-CX dated 26.07.2011,
while holding thus:
". . . . . .that ratio of consumption of material in the
manufacture of exported goods may be worked out taking
into account the wastage prescribed in the relevant SION
norms/CBEC Circular dated 29.05.2005 in case wastage
shown by the appellants on higher side. It was also
observed in the order that the rebate cannot be denied on
the ground of non-filing of declaration of some inputs if use
of said inputs in the manufacture of exported goods was
not in dispute and the duty paid inputs were received
directly from the factory of manufacture/registered dealer
as prescribed under Notification 21/04-CE (NT) dated
06.09.2004."
Thereafter, on 17.07.2012, a corrigendum was issued, to the
following effect:
"CORRIGENDUM
Last three lines i.e. of para 8.2 of the above order may
read as under:
"The ratio of consumption of materials on the
manufacturing of export products may be
worked out taking into account the wastage
prescribed in the relevant SION norms CBEC
Circular dated 29-05-1995 if the wastage
shown by application is found on higher side.""
2.2. Subsequently, the department raised a demand of
Rs.3,98,982/- vide order dated 02.05.2012; aggrieved from the
said action, the petitioner filed a writ petition (D.B.C.W.P. No.
8059/2012) before this Hon'ble Court, whereafter, the adjudicating
authority issued the consequential order, therefore, the said writ
petition was withdrawn on 14.08.2012 with liberty to question the
[2024:RJ-JD:21780-DB] (4 of 8) [CW-3083/2019]
consequential order before the department authority in the
appropriate proceedings.
2.3. Thereafter, the petitioner filed an appeal before the
Commissioner of Central Excise (Appeals), Customs, Central
Excise & Service Tax, Jaipur, NCRB against the order dated
02.05.2012. The Commissioner (Appeals) vide the impugned order
dated 30.09.2016 partly allowed appeal, while reducing the
demand from Rs.3,98,982/- to Rs.2,05,576/-; aggrieved by the
same, the petitioner filed a revision application under Section
35EE of the Central Excise Act, 1944 before the Government of
India, Ministry of Finance (Revisional Authority), and the same
was dismissed vide the impugned order dated 06.12.2018. Thus,
being aggrieved, the present petition has been preferred claiming
the afoer-quoted reliefs.
3. Learned counsel for the petitioner submitted that the order
directing applicability of SION norms is not correct because SION
norms do not prescribe the wastage as the actual quantity of
wastage depends on various parameters and there is no law to
apply the SION norms in cases where the manufacturer/exporter
has declared the actual input-output ratio which was verified by
the department as per the notification dated 06.09.2004.
3.1. Learned counsel further submitted that the impugned orders
are against Rule 18 of the Rules, 2002, because limiting the
rebate entitlement, contrary to these provisions is unlawful, and
therefore, the impugned orders are not justified in law.
3.2. It was also submitted that this Hon'ble Court vide order
dated 02.11.2016 passed in D.B. Civil Writ Petition No. 2004/2013
[2024:RJ-JD:21780-DB] (5 of 8) [CW-3083/2019]
held that the department was not correct in imposing any
condition while granting rebate of duty beyond the condition as
prescribed under Rule 18 of the Rules, 2002, but the Revisional
Authority held that the matter had attained finality by the earlier
order dated 26.07.2011 inasmuch as the issue of SION was
neither raised in the revision application nor was heard and
adjudicated by the Revisional Authority.
4. On the other hand, learned counsel appearing on behalf of
the respondents, while opposing the aforesaid submissions made
on behalf of the petitioner, submitted that the applicability of the
SION norms is based on statutory provision, notifications and
instructions. It was further submitted that the order passed by the
this Hon'ble Court on 02.11.2016 in D.B.C.W.P No. 2004/2013,
has not considered the entire statutory provisions, wherein it is
provided that the government may by notification specify certain
conditions or limitations, and the procedure and rebate shall be
granted, subject to such conditions and limitations, if any, of such
procedure.
4.1. It was further submitted that the Notification No. 21/2004-
CE (NT) dated 06.09.2004 and instructions were issued vide
Circular dated 29.05.1995, showing formula, and SION norms etc.
were made applicable to rebate clause. It was also submitted that
the applicability of SION norms was upheld by the Hon'ble Apex
Court in the case of Baraka Overseas Traders Vs Director
General of Foreign Trade (Civil Appeal No. 1426 of 2001,
decided on 11.09.2006), and in the case of Commissioner of
Custom Kandla Vs Man Industries Ltd (I.A. Nos 13-16 of
[2024:RJ-JD:21780-DB] (6 of 8) [CW-3083/2019]
2014 in Civil Appeal Nos. 9726-9729 of 2014, decided on
21.04.2015).
4.2. It was further submitted that as per the aforesaid case law,
the order dated 02.11.2016 passed by this Hon'ble Court is
distinguishable and not applicable in the present case.
5. It was also submitted that the Adjudicating Authority,
Appellate Authority, as well as Revisional Authority have correctly
interpreted the rules as per the precedent law laid down by the
Hon'ble Apex Court, and thereafter, passed the impugned orders,
which are justified in law.
6. Heard learned counsel of the parties as well as perused the
record of the case alongwith the judgments cited at the Bar.
7. This Court observes that the petitioner filed the
aforementioned rebate claims for grant of rebate on duty paid on
material used in manufacture of export goods, and the same was
sanctioned. Thereafter, the department filed an appeal before the
Commissioner (Appeals), and the same was dismissed on
03.02.2009. Subsequently, the department filed a revision
application and the same was decided on 26.07.2011.
7.1. Subsequently, the department raised a demand of
Rs.3,98,982/-, aggrieved by the same, the petitioner filed a writ
petition (D.B.C.W.P. No. 8059/2012) before this Court, and the
said writ petition was withdrawn on 14.08.2012 with liberty to
question the consequential order before the department in
appropriate proceedings. Thereafter, the petitioner filed the
aforementioned appeal against the order dated 02.05.2016 before
the appellate authority, and the said appeal was partly allowed,
[2024:RJ-JD:21780-DB] (7 of 8) [CW-3083/2019]
while reducing the demand from Rs.3,98,982/- to Rs.2,05,576/-.
Aggrieved by the same, the petitioner filed a revision application
before the Revisional Authority, and the same was dismissed vide
the impugned order.
8. This Court further observes that the department filed a
revision application against sanctioning of the rebate, wherein the
revisional authority passed the order dated 26.07.2011; in
furtherance, the amended corrigendum dated 17.07.2012 and
states that:
"CORRIGENDUM
Last three lines i.e. of para 8.2 of the above order may
read as under:
"The ratio of consumption of materials on the
manufacturing of export products may be worked
out taking into account the wastage prescribed in
the relevant SION norms CBEC Circular dated 29-
05-1995 if the wastage shown by application is
found on higher side.""
8.1. This Court also observes that after the said order, the
department passed the recovery order in question and the order
dated 26.07.2011 and amended corrigendum dated 17.07.2012
were not challenged before any higher authority, thus, the same
had attained finality. This Court further observes that vide the
order dated 02.11.2016 passed in D.B. Civil Writ Petition No.
2004/2013, this Hon'ble Court had only quashed the order dated
16.11.2011, while the order dated 26.07.2011 and amended
corrigendum 17.07.2012 were not even challenged, and therefore,
the order dated 02.11.2016 as passed in the aforesaid writ
[2024:RJ-JD:21780-DB] (8 of 8) [CW-3083/2019]
petition is on a different footing and does not have any bearing on
the present case.
9. This Court also observes that the petitioner itself has not
contested the SION norms before the Appellate Authority, which
has been recorded in the order dated 30.09.2016 by the Appellate
Authority, while indicating that, "I find that the appellant has not
disputed these SION norms". This Court further observes that
once the petitioner has not raised any dispute with regard to the
SION norms before the Appellate Authority, it cannot now raise
any dispute in this regard in the present petition.
10. This Court further observes that the Adjudicating Authority at
the time of issuance of the recovery order has not rightly
calculated the SION norms, and thus, thereafter, the Appellate
Authority changed the above-said calculation and reduced the
recovery amount, while making correct calculation as per the
SION norms; the said order has been upheld by the Revisional
Authority, vide the impugned order, which is justified in law.
11. Thus, in light of the aforesaid observations and looking into
the factual matrix of the present case, this Court does not find it a
fit case so as to grant any relief to the petitioner in the present
petition.
12. Consequently, the present petition is dismissed. All pending
applications stand disposed of.
(YOGENDRA KUMAR PUROHIT),J (DR.PUSHPENDRA SINGH BHATI),J
SKant/-
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