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2015 (7) TMI 1191 - CGOVT - Central ExciseDebonding of unit - 100% EOU converted to DTA - rebate - The original authority held that as the applicant availed higher rate of drawback comprising Customs, Central Excise and Service tax portion, the benefit of rebate cannot be held admissible as it will amount to double benefit. Accordingly, the original authority denied to sanction the rebate in cash and in such cases instead allowed re-credit in applicant s Cenvat account. Held that - the applicant had paid duty on export goods from Cenvat credit account. Therefore, it cannot be claimed that Cenvat facility has not been availed for goods under export and as such Condition No. 12(ii) of N/N. 68/2007-Cus. (N.T.), dated 16-7-2007 has been violated. Since the applicant has already availed said duty drawback in violation of said Condition 12(ii), allowing rebate of duty on exported goods will definitely amount to double benefit, which is not permissible either under scheme of Drawback or Rebate of duty. CBEC has also clarified in its Circular No. 83/2000-Cus., dated 16-10-2000 (F. No. 609/116/2000-DBK) that there is no double benefit available to manufacturer when only Customs portion of All Industry Rate of Drawback is claimed. The harmonious and combined reading of statutory provisions of Drawback and rebate scheme reveal that double benefit is not permissible as a general rule. However, in this case, the applicant has availed input stage rebate of duty in the form of higher duty drawback comprising of Customs, Central Excise and Service Tax portion, another benefit of rebate of duty paid on exported goods will definitely amount to double benefit. The instant rebate claims of duty paid on exported goods are not admissible - revision application rejected - decided against applicant.
Issues Involved:
1. Admissibility of rebate claims under Rule 18 of Central Excise Rules, 2002. 2. Double benefit availed by the applicant (drawback and rebate). 3. Interpretation of statutory provisions and notifications related to drawback and rebate. Detailed Analysis: 1. Admissibility of Rebate Claims under Rule 18 of Central Excise Rules, 2002: The applicant, initially registered as a 100% Export Oriented Unit (EOU), transitioned to a Domestic Tariff Area (DTA) unit and paid duty on inputs, work in progress, finished goods, consumables, and capital goods during debonding. They subsequently reversed the Cenvat credit availed on inputs and exported goods on payment of duty from their Cenvat credit account, filing rebate claims under Rule 18 of Central Excise Rules, 2002. The original authority and Commissioner (Appeals) denied the rebate in cash, allowing re-credit instead, citing that the applicant availed a higher rate of drawback, which includes Customs, Central Excise, and Service Tax, thus constituting a double benefit. The Government upheld this view, stating that allowing rebate on duty paid on exported goods while availing higher rate of duty drawback would contravene the principles laid down in the case of CCE Nagpur v. Indorama Textiles Ltd., which restricts rebate to either the input stage or the finished goods stage, but not both. 2. Double Benefit Availed by the Applicant (Drawback and Rebate): The applicant contended that they were entitled to the rebate in cash as they only availed Cenvat credit on capital goods and input services, which were unrelated to the drawback period. However, the Government observed that the applicant had indeed availed a higher rate of drawback, which included Customs, Central Excise, and Service Tax, and allowing a rebate on the exported goods would result in a double benefit. This is against the statutory provisions and the clarification provided by CBEC Circular No. 83/2000-Cus., which states that no double benefit is available when only the Customs portion of All Industry Rate of Drawback is claimed. The Government held that the applicant's claim for cash rebate was inadmissible as it would amount to a double benefit, which is not permissible under the Drawback or Rebate schemes. 3. Interpretation of Statutory Provisions and Notifications Related to Drawback and Rebate: The Government emphasized the need for a harmonious and combined reading of statutory provisions related to drawback and rebate. It noted that the term "drawback" as defined in Rule 2(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, refers to the rebate of duty chargeable on materials used in the manufacture of exported goods. Rule 18 of Central Excise Rules, 2002, allows for a rebate of duty paid on either the excisable goods or the materials used in their manufacture, but not both. The Government cited several Supreme Court judgments, including Amit Paper v. Commissioner of Central Excise and Commissioner of Trade Tax, UP v. Kajaria Ceramics Ltd., to reinforce that statutory provisions and notifications must be interpreted in a manner that avoids double benefits. The Government concluded that the applicant's claims were not admissible under Rule 18 of Central Excise Rules, 2002, as they had already availed a higher rate of duty drawback, thus violating the conditions stipulated in the relevant notifications and statutory provisions. Conclusion: The Government rejected the Revision Application, upholding the impugned Order-in-Appeal, and confirmed that the rebate claims of duty paid on exported goods were not admissible when the exporter had availed a higher rate of duty drawback. The decision was based on the principles of avoiding double benefits and adhering to statutory provisions and relevant notifications.
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