2005 (8) TMI 504 - AT - Central Excise

Summary

Issues involved:
The issue involved in this case is the denial of rebate claim u/r 12 of Central Excise Rules, 1944 by the Revenue due to the appellant clearing goods for export at a higher duty rate of 20% ad valorem instead of the concessional rate of 10% ad valorem as per the notification.

Details of the Judgment:

1. Manufacture and Clearance of Goods:
The appellant was engaged in manufacturing goods falling under Chapters 28 and 29 of Central Excise Traffic Act and availing Modvat credit on duty paid on inputs. They cleared bulk drugs in the domestic market at a 10% ad valorem duty rate as per Notification No. 6/94-C.E. and 8/95. For exports, duty was paid at a higher rate of 20% ad valorem without claiming the benefit of the notification. The classification list filed by the appellant for domestic clearances at 10% duty and for exports at 20% duty was approved by the Revenue.

2. Rebate Claim and Dispute:
During Dec. 94 to March 95, the appellant claimed a rebate of Rs. 1,97,799.60 in accordance with Rule 12 of Central Excise Rules, 1944 for goods exported. The Revenue contended that the higher duty for exports was paid to utilize accumulated Modvat credit, and thus, the rebate claim for the excess duty paid was not admissible. A show cause notice was issued for denial of the rebate claim.

3. Contentions and Adjudication:
The appellant argued that clearances were made as per the approved classification list and that the concessional rate of 10% applied only for bulk drugs. They highlighted the lack of a requirement for an end-use certificate in the notifications for exports. The adjudicating authority directed the appellant to deposit the excess rebate claimed on export clearances, which was upheld by the Commissioner (Appeals), leading to the present appeal.

4. Tribunal's Decision:
The Tribunal observed that the appellant had the option to avail or not avail the exemption notification as per the settled law. Since the appellant chose to clear exports without availing the concessional rate, they were entitled to the rebate based on the duty paid at 20% ad valorem. The Tribunal held that the orders of the lower authorities were unsustainable and allowed the appeal in favor of the appellant.

This judgment emphasizes the principle that an assessee's choice to forego exemption notification does not preclude them from claiming rebates based on the duty actually paid, even if a lower duty rate could have applied under a notification.