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2011 (2) TMI 1208 - HC - Central ExciseRevision application - Rebate - writ petition against the order of revision authority - double benefit - The contention of the petitioner is that one does not avail double benefit by merely including or claiming the Cenvat credit on inputs or on manufacture, when it is not utilized or is only partly utilized. The contention of the petitioner is that he is not claiming any benefit on account of utilized Cenvat credit and the rebate is claimed for the un-utilised Cenvat credit. In other words, the contention of the petitioner is that non-utilization of Cenvat credit is entitled to rebate in Rule 18 read with Notification No. 41/2001 dated 26th June, 2001 - Held that - in the case of Grasim Industries Ltd. (2010 -TMI - 76123 - DELHI HIGH COURT), it has been held that Rule 18 as framed stipulates that rebate of duty paid can be claimed either on excisable goods which are manufactured and exported or on the inputs and not both. It postulates either/or situation or should not be read as and . Thus, rebate on duty cannot be granted on exported goods and inputs simultaneously, Order is set aside and the matter is remanded to the Revisionary Authority for fresh decision in accordance with law.
Issues Involved:
1. Double Benefit Claim 2. Interpretation of Rule 18 of the Central Excise Rules, 2002 3. Procedural Compliance and Substantial Proof of Export 4. Applicability of Previous Case Laws and Orders Issue-wise Detailed Analysis: 1. Double Benefit Claim: The petitioner, a manufacturer and exporter of stainless steel circles and utensils, challenged the order that denied his claim for input stage rebate. The impugned order, dated 18th February 2010, cited para 1.5 of Part V of the C.B.E.C. Excise Manual of Supplementary Instructions, 2005, which prohibits claiming input stage rebate if the exporter avails duty drawback or input Cenvat credit. The order emphasized that allowing both Cenvat credit and input stage rebate would result in a double benefit, which is against government policy aimed at making exported goods competitive by relieving input duty burdens. The petitioner argued that he did not enjoy double benefits, as the Cenvat credit was not fully utilized due to the entire production being exported. 2. Interpretation of Rule 18 of the Central Excise Rules, 2002: Rule 18 allows the Central Government to grant a rebate of duty paid on excisable goods or materials used in manufacturing such goods, subject to conditions specified in the notification. The petitioner filed for a refund of unutilized Cenvat credit under Rule 18 and Notification No. 41/2001-C.E. (N.T.), dated 26th June 2001. The court had to determine whether the petitioner's claim for a rebate on unutilized Cenvat credit was valid under Rule 18. The impugned order was scrutinized to check if it aligned with the rule and notification. 3. Procedural Compliance and Substantial Proof of Export: The petitioner did not submit Form ARE-2, which requires certification by a Customs Officer. The court referred to the Supreme Court's judgment in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal and Ors., which discussed the strict and liberal interpretations of procedural compliance. The court noted that while eligibility conditions must be strictly met, procedural provisions should be construed liberally once eligibility is established. The court emphasized the doctrine of substantial compliance, which allows for some latitude in procedural requirements if the essence of the statute is met. 4. Applicability of Previous Case Laws and Orders: The petitioner cited previous cases, including the Bombay High Court's decision in Repro India Ltd. v. Union of India, which interpreted Rule 6 of the Rules concerning exports. The court also referred to the Delhi High Court's decision in Grasim Industries Ltd. v. Union of India, which held that rebate of duty can be claimed either on excisable goods or inputs, but not both. The court noted that the Revisionary Authority should consider these precedents when re-evaluating the petitioner's claim. Conclusion: The court set aside the impugned order and remanded the matter to the Revisionary Authority for a fresh decision, considering the observations made. The petitioner was directed to appear before the Revisionary Authority on 7th March 2011, and the matter was to be decided expeditiously within four months. The writ petition was disposed of with no order as to costs.
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