2006 (4) TMI 47 - HC - Central Excise

Rebate of duty - Appellant demanded for rebate of duty on the duty paid for good exported to Nepal Authority reject the rebate claim on the ground that there is no provision to grant rebate on duty of C.E. on the export to Nepal under C.E. Rules

Issues Involved:
1. Constitutionality of Notifications Nos. 41/94-C.E. (N.T.) and 42/94-C.E. (N.T.)
2. Rebate claims on excise duty for goods exported to Nepal
3. Alleged discrimination under Article 14, Article 19(1)(g), and Article 300A of the Constitution of India

Issue-wise Detailed Analysis:

1. Constitutionality of Notifications Nos. 41/94-C.E. (N.T.) and 42/94-C.E. (N.T.)
The company challenged the constitutionality, legality, and validity of Notifications Nos. 41/94-C.E. (N.T.) and 42/94-C.E. (N.T.), both dated 22nd September 1994. These notifications excluded the rebate of duty paid on excisable goods and materials used in the manufacture of export goods to Nepal and Bhutan. The challenge was based on the ground of discrimination, arguing that while no duty is payable on goods exported to Nepal under Bond in terms of Rule 13 of the Central Excise Rules, 1944, the rebate on excise duty paid at the time of removal of the goods exported to Nepal is not permissible, which was claimed to be discriminatory.

2. Rebate Claims on Excise Duty for Goods Exported to Nepal
The company exported consignments of Cold Rolled Sheets and Coils to Nepal by road, cleared on payment of excise duty. The company later realized that the goods should have been removed under bond as per Rule 13 of the Central Excise Rules, 1944. Attempts to retrieve and export the goods under bond failed as they had already crossed the Nepal border. The company's rebate claims were rejected by the Superintendent of Central Excise (Technical) on the grounds that there was no provision to grant rebate duty of central excise on goods exported to Nepal under the Central Excise Rules.

3. Alleged Discrimination Under Article 14, Article 19(1)(g), and Article 300A of the Constitution of India
The company's contention was that excluding the export of goods to Nepal from receiving a rebate on duty paid imposed an unreasonable restriction on the company's right under Article 19(1)(g) and was violative of Article 300A of the Constitution of India. The notifications were argued to be discriminatory as they allowed rebate for goods exported to other countries but not to Nepal and Bhutan.

Judgment Analysis:

Rejection of Rebate Claims:
The court noted that as per Rule 12 of the Central Excise Rules, 1944, rebate is allowable for goods exported on payment of excise duty. Notification No. 50/94-C.E. (N.T.) dated 22nd September 1994, issued under Rule 12(2), granted rebate of duty paid on excisable goods exported to Nepal to His Majesty's Government of Nepal. The company's claim for rebate was thus misconceived and rightly rejected by the authorities.

Policy and Competence of Central Government:
The court held that Notifications Nos. 41/94-C.E. (N.T.) and 42/94-C.E. (N.T.) were issued by the Central Government under Rule 12(2) as a matter of policy. Notification No. 41/94-C.E. (N.T.) specifically excluded goods exported to Nepal and Bhutan from the rebate. Similarly, Notification No. 42/94-C.E. (N.T.) excluded rebate of duty on materials used in the manufacture of goods exported to Nepal and Bhutan. The court found no merit in the challenge to these notifications as they were policy decisions within the competence and power of the Central Government.

No Violation of Constitutional Rights:
The court concluded that the notifications did not violate Articles 19(1)(g) and 300A of the Constitution of India. The company had exported goods to Nepal under Notification No. 50/94-C.E. (N.T.) on payment of duty, which was accepted by the Department. Having exercised this option, the company could not challenge the other notifications on the ground of discrimination.

Final Decision:
The writ petition was dismissed as wholly misconceived, with no order as to costs.

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