CENTURION LABORATORIES PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioners have challenged the order dated 24.08.2016 passed by the Assistant Commissioner, Vadodara (Annexure "I" to the petition), whereby he has rejected the rebate claim of the petitioners on the ground that the same is directly opposed to the judgment of this court in the case of Zenith Spinners v. Union of India, 2015 (326) ELT 97 (Guj.).

(2.) The first petitioner, a company, is engaged in the manufacture of various pharmaceutical products. During the course of its business, the first petitioner either sold in the local market or exported such products and received various kinds of inputs which were duty paid. The petitioners availed of Cenvat credit on such inputs, inasmuch as, they had paid for such credit in the purchase price of the goods. In the normal course of business, the petitioners also obtained certain inputs without payment of duty under the procedure prescribed under rule 19 of the Central Excise Rules, 2004 (hereinafter referred to as "the rules"). Rule 19 of the rules permits purchase of inputs required to be used for exporting the goods without payment of duty on following the procedure prescribed under Notification No.43/2001-C.E.(N.T.) dated 26.06.2001. The petitioners had also obtained certain inputs by following the said procedure under the rules. The first petitioner exports various kinds of pharmaceutical products.

(3.) It is the case of the petitioners that the Central Excise Act, 1944 (hereinafter referred to as "the Act") permits export of goods either without payment of duty or under bond under rule 19 of the rules or permits export of goods on payment of duty on the claim of rebate of duty paid under rule 18 of the rules. The petitioners exported their goods on payment of duty and not under bond. Since their exports were duty paid, the petitioners claimed rebate of duty paid thereon under rule 18 of the rules. In connection with the rebate claims, the petitioners received 11 show cause notices issued by the Department, which sought to place reliance upon the amendment in rule 19 of the rules by virtue of Notification No.10/2014. It is the case of the petitioners that during the course of the adjudication proceedings it was pointed out to the adjudicating authority that the said notification had been declared ultra vires the rules by this court in the case of Zenith Spinners v. Union of India (supra) and hence could not be relied upon. Despite the aforesaid position, the adjudicating authority rejected the rebate claims of the petitioners by seeking to distinguish the above referred decision of this court and by relying upon a clarification issued by the Central Board of Excise and Customs. Being aggrieved, the petitioners have filed the present petition.