2013 (12) TMI 1582 - CGOVT - Central Excise

Summary

Issues Involved:
1. Applicability of two different tariff notifications for the same goods.
2. Legality of rebate claim and method of refund.
3. Compliance with Central Board of Excise & Customs (CBEC) instructions.
4. Judicial precedents and applicability of case laws.

Summary:

Issue 1: Applicability of Two Different Tariff Notifications
The applicant, M/s. Cadila Healthcare Ltd., paid central excise duty at 4% (later 5%) for home consumption under Notification No. 4/2006-C.E. and 10% for exports under Notification No. 2/2008-C.E. The applicant argued that they could choose the most beneficial notification for each consignment, citing that both notifications were approved by the Indian Parliament. The Government observed that the general tariff rate was reduced through various notifications, and the effective rate of duty was prescribed separately. It was concluded that the duty was payable at the effective rate of 4% or 5% on exported goods, and the rebate could not be granted on the duty paid in excess of this rate.

Issue 2: Legality of Rebate Claim and Method of Refund
The adjudicating authority sanctioned cash rebate at 4% or 5% and allowed recredit of the remaining amount in the Cenvat credit account. The applicant contended that the rebate should be given by cheque as per Chapter 9 of the Supplementary Instructions of CBEC. The Government upheld the original authority's decision, stating that the excess duty paid is to be treated as a voluntary deposit and should be returned in the Cenvat credit account.

Issue 3: Compliance with CBEC Instructions
The Government emphasized that CBEC instructions are binding on departmental authorities. The instructions stated that export goods should be assessed in the same manner as goods for home consumption, implying the use of the effective rate of duty. The Government found that the applicant could not assess export goods at a higher rate while assessing home consumption goods at a lower rate.

Issue 4: Judicial Precedents and Applicability of Case Laws
The applicant cited various case laws to support their claim of choosing the most beneficial notification. However, the Government noted that these precedents did not apply to the context of rebate claims. The cited judgments were related to the admissibility of exemption benefits and not to the sanctioning of rebate claims. The Government also referred to other case laws supporting the view that rebate should be allowed at the effective rate and excess duty should be refunded in the Cenvat credit account.

Conclusion:
The Government rejected the revision applications, upholding the orders-in-appeal and confirming that the rebate is only admissible to the extent of duty paid at the effective rate of 4% or 5%. The excess duty paid is to be treated as a voluntary deposit and returned in the Cenvat credit account. The applications were dismissed as devoid of merit.