MODI BAKERS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is directed against Order -in -Original No. 8/BR/Th -I/2010, dated 9 -2 -2010 passed by Commissioner of Central Excise, Thane -I. Vide the impugned order, the learned adjudicating authority has confirmed a duty demand of Rs. 80,08,268/ - along with interest thereon and also imposing equivalent amount of penalty on the appellant, M/s. Modi Bakers, Ulhasnagar, Thane on the ground that the appellant availed ineligible Cenvat credit on the biscuits manufactured and exported by them. Aggrieved of the same, the appellant is before us.

(2.) THE learned Counsel for the appellant submits that they are manufacturers of biscuits. Some of the biscuits manufactured by them has a Retail Sales Price (RSP) of less than Rs. 100/ - per Kg. and they are availing duty exemption on the said goods, vide Serial No. 18A of the table annexed to Notification No. , dated 1 -3 -2006. In respect of such biscuits they are not availing any Cenvat credit on inputs/input services. They also manufacture and export the same biscuits abroad. In respect of such biscuits, RSP is not required to be indicated on the packages. The exports are effected under bond under Rule 19 of the Central Excise Rules, 2002. In respect of such exported biscuits, they have taken Cenvat credit on the inputs/input services used in or in relation to the manufacture and the department is objecting to such availment of credit on the ground that the goods are exempt from excise duty when sold in the domestic market. The learned Counsel points out that the requirement of affixing MRP under the Standards of Weights & Measures Act, 1976 read with the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 applies only to goods sold in India in retail and does not apply to goods exported. Therefore, the exemption provided under Serial No. 18A applies only to the goods sold in the domestic market and has no application whatsoever in respect of export products. Therefore, there is no bar in availing the Cenvat credit on the inputs/input services used in or in relation to the manufacture thereof. In support of his contention, he relies on Circular No. -CX, dated 28 -2 -2002 issued by the C.B.E. & C. wherein it has been clarified that RSP is not required to be printed in certain specified situations and one of the situations mentioned in the said circular is "goods meant for export". He also relies on the decision of the Tribunal in the case of Timewell Technics v. CCE - : 2009 (238) E.L.T. 643 (T) and Indo Nissin v. CCE - : 2008 (230) E.L.T. 143 (T) wherein it was held that in respect of export goods, there is no requirement of affixing MRP and valuation has to be done under Section 4 of the Act and not under 4A. Therefore, exemption based on RSPs would not apply to goods exported. The ratio of these decisions would apply to the facts of the present case. He also relies on the decision of Hon'ble High Court of Bombay in the case of Repro India Ltd. v. UOI -, 2009 (235) E.L.T. 614 (Bom.) wherein it was held that in terms of Rule 6(6)(v) of the Cenvat Credit Rules, 2004, the Cenvat credit is admissible on inputs/input services used in or in relation to manufacture of goods exported, even if such goods are exempt when sold in the domestic market. Accordingly, he pleads for setting aside the impugned order and allowing the appeal.

(3.) WE have carefully considered the submissions made by both the sides.