2012 (11) TMI 1066 - CGOVT - Central Excise

Denial of rebate claim - Denial on the ground applicant exported the goods before approval of input-output declaration by the department - Held that - as per the Notification No. 21/2004-C.E. (N.T.) read with Chapter 8 of C.B.E. & C. s Excise Manual of Supplementary Instructions, a manufacturer intending to claim input rebate should file a declaration with the jurisdictional Deputy/Assistant Commissioner of Central Excise for verification and approval of input-output ratio prior to export of the goods and obtain the permission of the Deputy/Assistant Commissioner of Central Excise for manufacture or processing and export of finished goods. - applicant failed to get approval of input-output ratio before export of goods. However, the said approval was granted by department subsequent to the export of goods. The said declaration was approved without any change. The input rebate claim is in accordance with the said declaration though approved subsequent to exports. - The declaration approved subsequent to exports is a procedural lapse which is condonable. The substantial benefit of input rebate claim cannot be denied for such procedural lapse. - Decided in favour of assessee.

Summary

Issues:
Claim of input rebate under Notification No. 21/2004-C.E. (N.T.) for duty paid on inputs used in the manufacture of export goods.

Analysis:
The revision applications were filed against the Order-in-Appeal rejecting the rebate claim due to procedural lapses. The applicant, a manufacturer of medicines, failed to include self-certification on ARE-2 forms and obtain necessary permission before export. The impugned order rejected the rebate claim. The Commissioner (Appeals) upheld the rejection, leading to the revision application before the Central Government.

The applicant argued that despite procedural lapses, the export was completed successfully, revenue was realized, and necessary permissions were obtained post-export. They contended that denial of benefits due to minor lapses was unjustified. The Government noted that the applicant exported goods and filed a rebate claim under Rule 18 and Notification No. 21/2004-C.E. (N.T.). The rejection was based on exporting goods before approval of input-output declaration. However, the input rebate claim was in accordance with the approved declaration post-export, and there was no dispute regarding the use of duty paid inputs in manufacturing exported goods.

According to the Notification and Excise Manual, approval of input-output ratio before export is required. Although the applicant failed to obtain this approval before export, the subsequent approval without changes was considered a procedural lapse. The Government held that the substantial benefit of the input rebate claim could not be denied for such a lapse. Thus, the Government allowed the revision application, setting aside the order of the Commissioner (Appeals) and holding the input rebate claim admissible under the Central Excise Rules and Notification.

In conclusion, the revision applications succeeded based on the grounds presented, and the Government ordered in favor of the applicant, granting the input rebate claim for duty paid on inputs used in the manufacture of export goods.