Page 159 - ELT_1st September 2020_Vol 373_Part 5

2020 ] SUPER SPINNING MILLS LTD. v. JT. SECY. REVISION APPLICATION, NEW DELHI 597

12. I have considered the arguments advanced on behalf of the peti-
tioner and the respondents.
13. The petitioner has unsuccessfully challenged the order denying re-
bate of Central Excise duty all the way up to the 1st respondent, the Joint Secre-
tary Revision Application, New Delhi under Section 35EE Central Excise Act,
1944.
14. Both the notifications namely Notification No. 29/2004-C.E., dated
9-7-2004 and Notification No. 30/2004-C.E., dated 9-7-2004 prescribes the rate of
tax to be paid on the exported organic cotton yarn.
15. Under Notification No. 29/2004-C.E., dated 9-7-2004 a manufactur-
er is required to pay tax at 4%. Whereas, under Notification No. 30/2004-C.E.,
dated 9-7-2004, a manufacturer could clear the goods without payment of duty
provided condition there are more satisfied. As per the proviso to the said notifi-
cation the notification does not apply to goods in respect of which credit of duty
on inputs or capital goods has been taken under the provisions of the Cenvat
Credit Rules, 2002.
16. The petitioner has opted to pay Excise duty in terms of the Notifica-
tion No. 29/2004-C.E., dated 9-7-2004. Therefore, it cannot be said that the organ-
ic cotton yarn exported by the petitioner was not liable to Excise duty so as to
deny the benefit of rebate claim under Rule 18 of the Central Excise Rules, 2002.
17. Notification No. 30/2004 is a conditional notification which allows
the manufacturer to clear the goods at nil duty provided no credit is availed on
inputs of capital goods under the provisions of the Cenvat Credit Rules, 2002.
18. As per sub-clause (1A) to Section 5A of the Central Excise Act, 1944
in case of excisable goods which is fully exempt from payment of excise duty the
manufacturer cannot be [levied] Excise duty. However, in the facts of the case it
is noticed that organic cotton yarn is exempt under Notification No. 30/2004-
C.E., dated 9-7-2004 under a conditional notification which the petitioner has not
fulfilled.
19. It is the choice of the manufacturer whether to opt for the benefit of
one of the notification. It cannot be forced on the petitioner merely because the
revenue would stand to gain by denying rebate of central excise duty paid on the
exported organic cotton yarn under Rule 18 of the Central Excise Rules, 2002.
20. The fact that the petitioner had availed Cenvat credit on the inputs
and capital goods and debited the same itself shows that the petitioner was not
entitled to the benefit of Notification No. 30/2004-C.E., dated 9-7-2004.
21. Since the petitioner has utilised Cenvat credit for discharging Excise
duty on the final product, show that the petitioner was therefore incapable of
availing the benefit of Notification No. 30/2004-C.E., dated 9-7-2004.
22. Therefore, the impugned order of the 1st respondent upholding the
order of the original and the appellate authority is unsustainable.
23. Therefore, denial of rebate of Central Excise duty paid by the peti-
tioner on the exported goods under Rule 18 of the Central Excise Rules, 2002
cannot be sustained.
24. These had been a denial of legitimate export incentives namely re-
bate of Central Excise duty paid on the excisable goods. Respondents have
wrongly denied to the petitioner a legitimate export incentive. Therefore, the im-
pugned order requires to be interfered.
EXCISE LAW TIMES  1st September 2020  159