2014 (3) TMI 1040 - CGOVT - Central Excise

Rebate claim rejected - Held that - Government notes that as per provisions of Rule 18 of Central Excise Rules, 2002 and Notification No. 19/2004-C.E. (N.T.), dated 6-7-2004 where any goods exported, the rebate of duty paid on excisable goods shall be granted subject to such conditions or limitation specified on the notification. In terms of condition (a) of said Notification, dated 6-9-2004 excisable goods shall be exported after payment of duty directly from a factory or warehouse except as otherwise permitted by C.B.E. & C. The Central Board of Excise and customs vide Circular No. 294/10/97-CX, dated 30-1-1997 relaxed the condition of direct export of goods from factory subject to compliance of procedure prescribed therein. The harmonious reading of these statutory provisions makes it clear that rebate shall be granted when excisable goods are exported after payment of duty. In this case it is on records that goods were exported without payment of duty. The fundamental condition for granting rebate claim is that duty paid goods are exported. In this case, this condition is not satisfied and therefore, rebate claim cannot be held admissible. Commissioner (Appeals) has erred in considering the adjustment of duty before filing of rebate claim as compliance of condition No. 2(a) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 r/w provision of Rule 18 of Central Excise Rules, 2002. In view of above said statutory position the said rebate claims of ₹ 91,34,616/- pertaining to ARE-1 Nos. 29/2009-10 and 30/2009-10 both, dated 17-3-2010 are not admissible to the respondents. - Decided against assessee

Issues Involved:
1. Rebate claims for Central Excise duty on exported goods.
2. Procedural compliance for self-removal and export of goods.
3. Payment of duty before filing rebate claims.
4. Appropriation of rebate claims against outstanding duty and interest liabilities.

Detailed Analysis:

1. Rebate Claims for Central Excise Duty on Exported Goods:
The primary issue revolves around the rebate claims filed by M/s. Sanket Food Products P. Ltd. for the refund of Central Excise duty amounting to Rs. 91,34,616/- on exports made in March 2010. The Deputy Commissioner sanctioned the rebate claims but appropriated the sanctioned amount against outstanding interest and duty liabilities. The Commissioner (Appeals) partially allowed the departmental appeal, disallowing the rebate claim of Rs. 45,67,308/- for ARE-1 No. 30/2009-10 but upholding the rebate claim for ARE-1 No. 29/2009-10.

2. Procedural Compliance for Self-Removal and Export of Goods:
The department argued that the Joint Secretary erred in treating the non-compliance with procedural requirements as condonable deviations. The conditions in Notifications No. 19/2004-C.E. (N.T.) and No. 32/2008-C.E. (N.T.) are substantive to ensure the nexus between the goods cleared from the factory and those exported. The goods were not directly exported from the factory, and the necessary procedures for self-sealing were not followed, which undermines the identity of the exported goods.

3. Payment of Duty Before Filing Rebate Claims:
The rebate claim for ARE-1 No. 30/2009-10 was disallowed because it was filed before the duty was appropriated on 7-3-2011, making it premature. The Commissioner (Appeals) upheld the rebate claim for ARE-1 No. 29/2009-10, filed on 9-3-2011, as the duty was paid through appropriation before the rebate claim was filed. The respondent argued that by the time the Deputy Commissioner decided the rebate claims, the duty had been appropriated, making the goods duty-paid.

4. Appropriation of Rebate Claims Against Outstanding Duty and Interest Liabilities:
The department appropriated the rebate claims against the duty and interest liabilities for March 2010. The respondent contended that the rebate claims should be allowed as the duty was paid before the claims were decided. The department's retention of duty for exported goods, even after appropriating earlier rebate claims towards March 2010 duty, was challenged as unjust.

Judgment:
The Government noted that the duty was not paid at the time of clearance for export, making the goods non-duty paid at the time of export. The fundamental condition for granting a rebate is that the goods must be duty-paid at the time of export. The Commissioner (Appeals) erred in considering the adjustment of duty before filing the rebate claim as compliance with the conditions of Notification No. 19/2004-C.E. (N.T.). Therefore, the rebate claims of Rs. 91,34,616/- for ARE-1 Nos. 29/2009-10 and 30/2009-10 are not admissible. The revision application filed by the department is allowed, and the revision application filed by the respondent is rejected.

Conclusion:
The judgment emphasizes the necessity of compliance with procedural and substantive conditions for rebate claims, particularly the requirement that goods must be duty-paid at the time of export. The decision underscores the importance of adhering to statutory provisions and procedural requirements to ensure the integrity of the rebate process.

← Previous Next →