2011 (2) TMI 669 - CGOVT - Central Excise

Rebate of duty - Import - Government observes that after the abolition of Rule 12B of Central Excise Rules, 2002, the applicant is not deemed to be a manufacturer after 8-7-04, so they cannot avail cenvat credit on the goods received in factory after that date - As they have utilized the wrongly availed cenvat credit, so the rebate was rightly denied by the lower authorities - The applicant has not submitted any evidence/proof to prove that the goods were in transit during that period and was received on 9-7-04 - Moreover, the assessee is entitled to claim cenvat credit only on the physical receipt of the inputs in their premises and the prevailing Rule of that date will prevail immaterial of the duty paid nature of the goods which cleared earlier on payment of duty - Moreover, the documents based on which the cenvat credit was taken omitted from Rule 7 of the Cenvat Credit Rules, 2002 vide Notification No. 12/2004-C.E. (N.T.), dated 9-7-04 - The applicant was not entitled to take cenvat credit after 8-7-04 and therefore debit of such wrongly taken cenvat credit cannot be considered as payment of duty in respect of impugned ARE-1s - Therefore, the applicant is not entitled for the rebate of duty under Rule 18 of Central Excise Rules, 2002 on the goods imported.

Summary

Issues:
1. Rebate claim of central excise duty under Rule 18 of Central Excise Rules, 2002.
2. Denial of cenvat credit and rejection of rebate claim.
3. Applicability of Rule 12B of Central Excise Rules, 2002.
4. Validity of cenvat credit availed after the abolition of Rule 12B.
5. Admissibility of rebate claim under Rule 18 of Central Excise Rules, 2002.

Issue 1: The applicant filed rebate claims for central excise duty under Rule 18 of Central Excise Rules, 2002, in relation to exports made. The applicant had followed the prescribed procedures and complied with the Central Excise Law as an "Assessee." The claim was partly rejected by the Asstt. Commissioner, who sanctioned only a portion of the claimed amount.

Issue 2: The rejection of the rebate claim and denial of cenvat credit were challenged by the applicant. The argument presented emphasized the internationally accepted principle of relieving export goods from the burden of duties to enhance competitiveness. The applicant contended that the denial was based on technical grounds and discouraged export, highlighting that the rebate was a reimbursement, not a benefit.

Issue 3: The judgment analyzed the applicability of Rule 12B of Central Excise Rules, 2002, which was abolished on 8-7-04. The applicant received duty-paid fabrics after this date and availed cenvat credit on these goods. The Asstt. Commissioner held that cenvat credit on post-8-7-04 goods was inadmissible, impacting the rebate claim under Rule 18.

Issue 4: The Government observed that post the abolition of Rule 12B, the applicant was not entitled to cenvat credit on goods received after 8-7-04. The applicant failed to provide evidence that the goods were in transit during the transitional period. The judgment emphasized that cenvat credit could only be claimed upon physical receipt of inputs, irrespective of the duty paid nature of earlier cleared goods.

Issue 5: The Government upheld the lower authorities' decision to deny the rebate claim, stating that the applicant's utilization of wrongly availed cenvat credit rendered the claim inadmissible. The judgment concluded that the applicant was not entitled to the rebate under Rule 18 of Central Excise Rules, 2002, for the imported goods. The revision application was rejected for lacking merit.