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Judgment
The brief facts of the case are that the appellant are engaged in the manufacture of Nail Polish bottle. They are exporting the said bottle along with
the cap and brush which is procured from the open market (duty paid) and the same is exported without availing cenvat credit and without paying any
duty. The case of the department is that since cap and brush though exported is a pure trading activity and not a manufacturing activity in terms of
Rule 6(3), the appellant is required to reverse the proportionate credit attributed to the common input service used for clearance of manufactured
goods as well as trading goods being the trading activity is exempted service.
Shri Mehul Jivani Learned Chartered Accountant appearing on behalf of the appellant submits that there is no dispute that the trading goods i.e. cap
and brush or nail polish bottle has been exported, the department has denied the benefit of Rule 6(6)(v) of Cenvat Credit Rules, 2004 on the ground
that the trading goods have not been exported under bond. He submits that there is no compulsion that the trading goods should be exported under
bond only, bond is required only if any excise duty payable on the exported goods. In this case, since the appellant have procured duty paid goods
which has been traded for export, no duty is payable, therefore, no bond was executed. He submits that in respect of export of goods which is not
dutiable, no bond was executed and in various judgments, it was held that to make eligible for Rule 6(6)(v) of Cenvat Credit Rules, 2004 in case of
non-duty paid goods, bond is not compulsory. He placed reliance on the following judgments:
• Repro India Ltd. 2009 (235) ELT 614 (Bom.)
• Universal Cable Ltd .2017 (345) ELT 308 (Tri. Del.)
• Coca Cola India Pvt. Ltd. 2007 (213) ELT 490 (SC)
• S.N. Modani 2018 (364) ELT 973 (Tri. Del.)
• Jolly Board Ltd. 2015 (321) ELT 502 (Tr. Mum.)
• Cap &Seal (Indore) Pvt. Ltd. 2018 (15) GSTL 74 (Tri. Del.)
Shri Dharmendra kanjani, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the findings of the
impugned order. He submits that Rule 6(6)(v) is very clear that rule 6(3) is not applicable only if the excisable goods are cleared under bond. In the
present case, the goods are not excisable but trading goods. Moreover, no bond has been executed for export of such trading goods, therefore, the
appellant will not get the benefit of Rule 6(6)(v) of Cenvat Credit Rules, 2004. Learned AR relied on the following case laws:
• Lally Automobiles P. Ltd. 2018 (17) GSTL 422 (Del.)
• Lally Automobiles P. Ltd. 2019 (24) GSTL J115 (SC)
• Ruchika Global Interlinks 2017 (5) GSTL 225 (Mad.)
I have carefully considered the submission made by both the sides and perused the records. I find that the trading goods, i.e. cap and brush was
procured by the appellant duly duty paid and the same was exported. Since the appellant has not taken the cenvat credit, they were neither required to
pay the duty nor to execute bond for export, therefore, for export of such trading goods no bond was executed. This issue has come up before the
Hon’ble Bombay High Court that whether to allow the benefit of 6(6)(v) execution of export bond is compulsory or otherwise, the Hon’ble
Bombay High Court in case of Repro (India) Ltd. (supra) clearly held that in case of non-dutiable goods or exempted goods, even though export was
not made under bond, benefit of Rule 6(6)(v) cannot be denied and consequently, Rule 6(3)(b) is not attracted. Similar view was taken by this Tribunal
in the following judgments:
• S.N. Modani 2018 (364) ELT 973 (Tri. Del.)
• Jolly Board Ltd. 2015 (321) ELT 502 (Tr. Mum.)
• Cap &Seal (Indore) Pvt. Ltd. 2018 (15) GSTL 74 (Tri. Del.)
Thus, in view of the consistent view taken in the above judgement which is based on the Hon’ble Bombay High Court in the case of Repro (India)
Ltd., it is settled that even though the goods are exported without bond, the benefit of Rule 6(6)(v) is available to the assessee, and consequently, Rule
6(1), (2), (3) And (4) shall not attract. Accordingly, the impugned order is set aside. Appeal is allowed.
(Dictated and pronounced in open court)