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2012 (12) TMI 972 - CGOVT - Central ExciseDenial of rebate claim - During the relevant time duty of said goods was nil as per Notification No. 29/2004-C.E. dated 9-7-2004 as amended vide Notification No. 58/2008-C.E. dated 7-12-2008 - applicant paid duty on the exempted goods - Held that - As per explanation 1(A) to Section 5(A) of Central Excise Act 1944 the manufacturer of such goods has no option to pay Central Excise duty since Notification No. 29/2004-C.E. dated 9-7-2004 as amended issued under Section 5A(1A) of Central Excise Act 1944 grants unconditional exemption from whole of duty. The duty paid cannot be treated as duty paid under the provision of Central Excise Law. As such the rebate of said amount is not admissible to the applicant under Rule 18 of Central Excise Rules 2002 read with Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004 since exported goods cannot be treated as duty paid goods. - impugned order-in-appeal is upheld to this extent - amount so paid by the applicant is to be treated as voluntary deposit with Government and same is to be refunded in the manner it was initially paid. In the instant case the same was paid from Cenvat credit account and hence government directs that the said amount may be allowed to be re-credited in their Cenvat credit account. - Decided partly in favour of assessee.
Issues:
1. Rebate claim on duty paid for exported goods under Notification No. 59/2008-C.E. 2. Interpretation of Section 5A(1A) of Central Excise Act, 1944. 3. Eligibility for refund of Cenvat credit or duty paid on export goods. Analysis: Issue 1: Rebate claim on duty paid for exported goods under Notification No. 59/2008-C.E. The case involved M/s. JVS Export claiming rebate of duty paid on exported goods under Notification No. 59/2008-C.E. The applicants exported cotton items under Notification No. 58/2008-C.E., dated 7-12-2008, which amended the duty to zero. However, they erroneously paid duty on the exempted goods. The lower authorities rejected the rebate claim based on Rule 18 of Central Excise Rules, 2002 and Section 11B of Central Excise Act. Issue 2: Interpretation of Section 5A(1A) of Central Excise Act, 1944 The Central Government observed that the applicants had no option to pay duty on the exported goods under Notification No. 59/2008-C.E., dated 7-12-2008, as the goods were unconditionally exempted from excise duty under Notification No. 29/2004-C.E., dated 9-7-2004, as amended. The Government upheld the order-in-appeal, citing Section 5A(1A) of the Central Excise Act, and a circular clarifying the issue related to simultaneous exemption notifications. Issue 3: Eligibility for refund of Cenvat credit or duty paid on export goods The applicants argued for refund of the Cenvat credit utilized for duty payment on export goods or for a refund of the duty paid. The Government referred to a Law Ministry opinion that under Section 5A(1A) of the Act, manufacturers cannot opt to pay duty under Notification No. 59/2008-C.E. and avail Cenvat credit. The Government directed that the duty paid should be treated as a voluntary deposit and refunded in the manner it was paid, allowing re-credit of the amount in the Cenvat credit account. In conclusion, the revision application was disposed of, modifying the impugned order-in-appeal to allow re-credit of the duty paid amount in the Cenvat credit account.
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