2009 (10) TMI 756 - AT - Central Excise

Rebate claim - export of goods - N/N. 10/2003-C.E. dated 1-3-2003 - Section 5A of the CEA 1944 - Held that - the provisions of Section 5A(1A) are apparently clarificatory in nature and therefore it cannot be said that they would not apply to the cases relating to the period prior to 13th May 2005. The applicability thereof would obviously depend upon the facts of each case. However in the case in hand even if we assume its applicability to the facts of the case the conclusion which is to be arrived at cannot be different from the one arrived at by the Commissioner (Appeals) - the respondent would be entitled to get the same appropriated for the purpose of clearance of the duty liability and for the same reason they would be entitled to claim the rebate under Rule 18. It is true that in terms of sub-rule (1) of Rule 6 of Cenvat Credit Rules the final product being exempted from duty liability the manufacturer would not be entitled to avail credit in relation to the duty paid on the inputs procured for utilization thereof in the manufacturing process of the final product. However sub-rule (5) of the said Rules which was in force at the relevant time clearly provided that the provision to sub-rule (1) would not be applicable in case the exempted goods were cleared for export under bond in terms of the provision of the Central Excise Rules 2002. Considering the said provision certainly the assessee could have availed the benefit under the said provisions and therefore it cannot be said that the respondent would be disentitled for the rebate on the said ground. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order allowing rebate claim on stainless steel manufacture under excise duty exemption.

Analysis:
The appeal arose from the Commissioner (Appeals) allowing rebate claims by the respondents against Deputy Commissioner's orders rejecting rebate claims related to stainless steel manufacture exempt from excise duty. The respondents paid duty on the product cleared for export, seeking rebate under Rule 18 of Central Excise Rules, 2002. The appellants argued that as the product was exempt, no duty should have been paid, and hence, no rebate was due. They relied on legal precedents and amended provisions of the Central Excise Act, 1944 to support their position.

The respondents contended that they had the right to pay duty on the exempted product and claim rebate as per statutory provisions. They highlighted Rule 6 of the Cenvat Credit Rules, 2002, and various legal decisions supporting their claim for rebate and cenvat credit. They argued that the Department's stance on availing cenvat credit for duty-free products cleared for export was incorrect. They emphasized the right of the assessee to choose between exemption and duty payment, citing relevant legal judgments.

The Tribunal, in its analysis, referenced legal precedents such as the Reliance Industries case and the Hico Products case to support the respondents' right to choose between duty payment and exemption. The Tribunal noted that the Commissioner (Appeals) based the rebate grant on these rulings. Additionally, the Tribunal discussed the applicability of Section 5A(1A) and the eligibility of the respondents for cenvat credit under Rule 6 of the Cenvat Credit Rules, 2002, for exported goods exempt from duty. The Tribunal concluded that the respondents were entitled to claim rebate and dismissed the appeal, affirming the Commissioner (Appeals) decision.

In summary, the Tribunal upheld the Commissioner (Appeals) decision to allow the rebate claim for the respondents based on legal precedents and statutory provisions governing duty payment, exemption, and cenvat credit for exported goods. The Tribunal rejected the appellant's arguments against the rebate claim, emphasizing the respondents' right to choose between duty payment and exemption under the law.