2012 (10) TMI 863 - CGOVT - Central Excise

Export - claims of rebate - alleged that the applicants exported their finished goods before permission of input-out ratio was granted by the competent authority Held that - Fundamental requirement for claiming rebate of duty paid on inputs is that the use of duty paid inputs in the manufacture of export goods is proved beyond doubt. Applicant has failed to submit any records proving use of said duty paid inputs in the manufacture of export goods. The said lapse can not be treated as a procedural lapse, as it is the substantial requirement of use of duty paid inputs in the manufacture of export goods is not complied with - rebate claims rejected as the same were not admissible under Rule 18 of the Central Excise Rules, 2002

Summary

Issues:
1. Admissibility of rebate claim under Rule 18 of the Central Excise Rules, 2002.
2. Compliance with Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004.
3. Maintenance of records regarding receipt, consumption, and utilization of inputs in the manufacture of exported goods.
4. Approval of input-output norms by the department post-export.
5. Requirement to comply with instructions in the C.B.E.C. Excise Manual.

Issue 1: Admissibility of rebate claim under Rule 18 of the Central Excise Rules, 2002
The Applicant, engaged in manufacturing dyes and exporting them under claims of rebate, filed rebate claims for Central Excise duty paid on inputs used in the manufacture of final products. The Adjudicating authority rejected the rebate claims, leading to appeals before the Commissioner (Appeals) and subsequently to Revision Applications before the Central Government.

Issue 2: Compliance with Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004
The central issue revolved around compliance with Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004, which required obtaining permission for input-output ratio before exporting final goods. The Applicant argued that the notification did not mandate such permission before manufacture and export, challenging the interpretation adopted in the impugned orders.

Issue 3: Maintenance of records regarding receipt, consumption, and utilization of inputs
The Applicant contended that the records of receipt, disposal, and utilization of inputs were not a condition for claiming rebate under the notification. They highlighted that the Central Excise Manual's provisions on record maintenance could not be read as part of the notification unless specifically provided.

Issue 4: Approval of input-output norms by the department post-export
Although the Applicant had applied for approval of input-output norms before export, the approval came after the export of goods. The Government noted that once the norms were approved, the substantial requirement was met, despite the timing of approval.

Issue 5: Requirement to comply with instructions in the C.B.E.C. Excise Manual
The Government emphasized the need to comply with instructions in the C.B.E.C. Excise Manual, particularly regarding maintaining records of inputs used in exported goods. The Applicant's failure to provide records proving the use of duty-paid inputs in manufacturing export goods was deemed a substantial requirement, not a procedural lapse.

In conclusion, the Central Government upheld the rejection of rebate claims, citing non-compliance with the essential requirement of proving the use of duty-paid inputs in the manufacture of exported goods. The case laws cited by the Applicant were deemed inapplicable as they pertained to procedural lapses, whereas the present case involved a failure to meet a substantial requirement.