2015 (6) TMI 1111 - CGOVT - Central Excise

Rebate claim - denial on the ground that the merchant exporter have availed drawback of duty in respect of the goods for which the manufacturer has claimed the rebate of Central Excise duty paid at the time of clearance and hence claims of rebate would result in double benefit - Held that - The provisions of Rule 18 of Central Excise Rules 2002 are interpreted by Hon ble High Court of Bombay at Nagpur Bench in the case of CCE Nagpur v. Indorama Textiles Ltd. 2006 (5) TMI 8 - HIGH COURT OF JUDICATURE (BOMBAY) wherein it was held that rebate provided in Rule 18 of Central Excise Rule 2002 is only on duty paid on one of the stages i.e. either on excisable goods or on materials used in manufacture or processing of such goods. Hence assessee is not entitled to claim rebate of duty paid at both stages simultaneously i.e. duty paid at input stage as well as finished goods stage. The applicant could not substantiate their claim that the merchant exporter has availed only Customs portion of drawback by means of any valid documentary evidences. Hence it can be implied that the applicant has availed both Customs as well as Central Excise portion of drawback. Under such circumstances allowing rebate would amount to double benefit which cannot be held admissible. Revision application rejected - decided against applicant.

Summary

Issues Involved:

1. Admissibility of rebate claims when duty drawback has been availed.
2. Interpretation of Notification No. 19/2004-C.E. (N.T.) in relation to rebate and drawback.
3. Evidence required to substantiate claims of non-availment of certain drawbacks.
4. Legal precedents and their applicability to the case.

Detailed Analysis:

1. Admissibility of Rebate Claims When Duty Drawback Has Been Availed:

The applicant, a manufacturer, filed rebate claims for excise duty paid on goods cleared for export through a merchant exporter. The Original Authority and the Commissioner (Appeals) rejected these claims on the grounds that the merchant exporter had already availed duty drawback, which would result in a double benefit if rebate was allowed. The Government upheld this decision, noting that "allowing rebate would amount to double benefit, which is not admissible." The judgment emphasized that the applicant failed to prove that only the Customs portion of the drawback was claimed, implying that both Customs and Central Excise portions were availed.

2. Interpretation of Notification No. 19/2004-C.E. (N.T.) in Relation to Rebate and Drawback:

The applicant argued that Notification No. 19/2004-C.E. (N.T.) does not contain a condition prohibiting the rebate if drawback has been claimed. However, the Government observed that the harmonious and combined reading of statutory provisions relating to rebate and duty drawback schemes reveals that double benefit is not permissible. The judgment cited the case of CCE, Nagpur v. Indorama Textiles Ltd., where it was held that rebate is only on duty paid at one stage-either on excisable goods or on materials used in manufacture.

3. Evidence Required to Substantiate Claims of Non-Availment of Certain Drawbacks:

The applicant claimed that they had not availed Cenvat Credit on inputs used in the manufacture of the final product and had paid duty through the Personal Ledger Account (PLA). They argued that if the rebate is not granted, the duty paid should be considered as excess and re-credited. However, the Government found that the applicant "failed to produce any documentary evidences to substantiate that the drawback of only Customs portion has been claimed." Without such evidence, the claim for rebate was considered inadmissible.

4. Legal Precedents and Their Applicability to the Case:

The applicant relied on various case laws, including Munot Textiles and Circular No. 83/2000-Cus., to support their claim. However, the Government noted that these precedents were not applicable as the facts involved were different. The judgment emphasized that "primacy to a Notification cannot be given over Rules" and that statutory provisions must be read in their entirety. The Government concluded that the claimed rebate of duty paid on exported goods is not admissible under Rule 18 of Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.).

Conclusion:

The Government upheld the rejection of the rebate claims, stating that the applicant's failure to prove that only the Customs portion of the drawback was claimed resulted in a situation where allowing the rebate would amount to a double benefit. The judgment emphasized the importance of adhering to statutory provisions and the inadmissibility of double benefits under the rebate and duty drawback schemes. The Revision Applications were thus rejected as devoid of merit.