Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2012 (12) TMI HC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2012 (12) TMI 837 - HC - Central Excise


Issues:
Denial of rebate of duty based on non-compliance with Rule 7(2) of the Cenvat Credit Rules, 2002.

Analysis:
The judgment involves two Special Civil Applications concerning the denial of rebate of duties paid on exported goods. The petitioners, merchant-exporters, purchased unprocessed fabrics from weavers and claimed rebate on the duties paid. The Assistant Commissioner rejected the rebate claims, stating the weavers were fake as per Alert Circulars. The petitioners' appeals were rejected by the Commissioner and the Revision by the Joint Secretary. The petitioners argued the transactions were genuine, but the Department relied on Alert Circulars. The court referenced a previous judgment where it was held that while non-traceability of the original manufacturer does not reverse CENVAT credit, Rule 7(2) requires taking reasonable steps to ensure duty payment on goods. As the petitioners did not comply with Rule 7(2) requirements, rebate denial was upheld.

The court emphasized that compliance with Rule 7(2) of the Cenvat Credit Rules is crucial for claiming rebates on duties paid. It was noted that even though the original manufacturer's traceability does not affect credit, failure to take reasonable steps as per the Rule leads to rebate denial. The court referred to a specific case to support this stance. In the present cases, the petitioners did not fulfill the steps outlined in Rule 7(2) Explanation, leading to the rightful denial of duty rebate. The judgment reiterated the importance of adhering to statutory requirements for claiming benefits under the Cenvat Credit Rules.

The court dismissed the Special Civil Applications due to the petitioners' non-compliance with Rule 7(2) of the Cenvat Credit Rules. Since the petitioners failed to take the steps outlined in the Rule's Explanation, the denial of duty rebate was upheld. The judgment clarified that the non-compliance with the Rule was the decisive factor in dismissing the applications. Additionally, as the petitioners did not address the issue of taking reasonable steps under Rule 7(2), the court did not delve into the validity of Alert Circulars. The court concluded by dismissing the applications, discharging the notice, and not imposing any costs based on the circumstances of the case.

 

 

 

 

Quick Updates:Latest Updates