2012 (5) TMI 407 - CGOVT - Central Excise

Revisions application Cenvat credit - clearance of goods on payment of duty and receiving back of 92.748 Kgs of goods in the factory and re-credit of Cenvat of such payment - Respondents got cenvat credit of duty involved against 92.748 Kgs in terms of Rule 16(1) of the Central Excise Rules, 2002, subsequently they exported 36.3 Kgs of aforesaid goods against claim for rebate under Rule 18 of the Central Excise Rules, 2002 - paid the duty by debiting their cenvat account under Rule 16(2) of the Central Excise Rules, 2002 Held that - Rule 16(2), it is provided that the amount paid under this sub-section shall be allowed as CENVAT Credit as if it was a duty paid by the manufacturer, who removes the goods. So provision of 16(2) makes it clear that the amount actually paid is nothing but duty and as such payment by the Respondents should be treated as payment of duty, Respondents are eligible for rebate on payment of duty paid against export product by way of debiting of Cenvat Credit - Revision Application by revenue rejected.

Summary

Issues:
1. Eligibility for rebate under Rule 18 of the Central Excise Rules.
2. Interpretation of Rule 16(2) regarding payment of duty.
3. Application of deeming provision in Explanation to Rule 16(1).
4. Admissibility of rebate claim based on duty payment.

Issue 1: Eligibility for rebate under Rule 18 of the Central Excise Rules:
The case involved a dispute over the eligibility of a party for rebate under Rule 18 of the Central Excise Rules. The Respondent had exported goods after processing, and the department rejected the rebate claim, arguing that the claim was for an amount paid under Rule 16(2) and not for duty. The Commissioner (Appeals) allowed the rebate, leading to the revision application.

Issue 2: Interpretation of Rule 16(2) regarding payment of duty:
The Applicant Commissioner contended that the amount paid under Rule 16(2) should not be considered as duty for the purpose of rebate, as it was not paid at the rates set forth in the First Schedule to the Tariff Act. The Respondent argued that the amount paid should be treated as duty, citing the Explanation to sub-rule (2) of Rule 16.

Issue 3: Application of deeming provision in Explanation to Rule 16(1):
The Applicant Commissioner argued that the Explanation appended to Rule 16(1) only pertains to the buyer's entitlement to credit, not to rebate for exports. The Respondent countered that the amount paid under Rule 16(2) should be treated as duty paid by the manufacturer, as per the Explanation.

Issue 4: Admissibility of rebate claim based on duty payment:
The Government analyzed the facts of the case, noting the clearance of goods, re-credit of Cenvat, and subsequent export against rebate claim. The Government observed that the Respondents had paid duty by debiting their Cenvat account under Rule 16(2), which allows the amount paid to be treated as duty. Therefore, the Government upheld the decision of the Commissioner (Appeals) and deemed the Respondents eligible for rebate based on the duty payment.

In conclusion, the Government rejected the revision application, finding it devoid of merit and upheld the order of the Appellate Authority, confirming the eligibility of the Respondents for rebate on the payment of duty against the exported products through debiting of Cenvat Credit.