2013 (4) TMI 590 - Commissioner - Central Excise

Rejection of Rebate claims(not discharged the duty liability) - Rule 12 or the notifications issued thereunder would not apply to goods covered in the Compounded levy was not correct and to that extent the impugned order was required to be set aside/modified - Held that - Govt. finds force and concurs with the view of the applicant in view of the self explanatory and clarificatory portion of C.B.E. & C. Circular No 418/51/1998-CX. dated 2-9-1998 extracted as per para 15 above which clarifies That rebate will be allowed even in cases where manufacturers make delayed payment. - Further the Hon ble Supreme Court s Judgment in Omkar Overseas Ltd. v. UOI (2003 (8) TMI 45 - SUPREME COURT OF INDIA ) cited by the applicants also support this view. Thus finally Govt. of India allowed the rebate claim on the condition that the rebate has to be allowed in respect of the claims which are not hit by limitation provided the duty under the Compounded Levy Scheme is fully discharged by the manufacturer of the goods under Compounded Levy Scheme as per the rate specified by Notification No. 31/98-C.E. (N.T.) dated 24-8-98 even for the period 1-8-1997 to 23-8-1998 - The rate of rebate specified is 12% on FOB value - Hence the Revenue s contention in this aspect also does not survive.

Summary

Issues:
1. Rebate claims filed by M/s. Goyal Metal Industries (P) Ltd.
2. Discrepancies in duty payment and rebate claims.
3. Interpretation of Notification No. 31/98-C.E. (N.T.).
4. Decision to allow or reject rebate claims.

Issue 1: The case involves rebate claims filed by M/s. Goyal Metal Industries (P) Ltd. (GMI), a merchant exporter of non-alloy steel manufactured by M/s. United Metal Industries. The initial rebate claims were rejected due to the main manufacturer's failure to discharge duty liability. Subsequent revision orders by the Government of India allowed GMI's claims, leading to the filing of rebate claims again by GMI.

Issue 2: The Revenue challenged the rebate claims sanctioned by the Lower Adjudicating Authority (LAA) in O-in-O Nos. 24-27/2005, 30, 31, 33-36/2005, while GMI appealed against the rejection of rebate claims in O-in-O No. 6/2006 dated 30-3-2006 by the LAA. The Revenue raised concerns about delayed duty payment, non-payment of interest and penalty, and the application of rebate rates under Notification No. 31/98-C.E. (N.T.).

Issue 3: The Commissioner analyzed the grounds raised by the Revenue, emphasizing that delayed duty payment does not disqualify GMI from claiming rebate, citing relevant Circulars and a Supreme Court judgment. The Commissioner clarified that rebate is on duty paid only and should not be linked to interest and penalty payments. The interpretation of Notification No. 31/98-C.E. (N.T.) was crucial in determining the entitlement to a 12% rebate on FOB value.

Issue 4: After a thorough review of the case records and submissions, the Commissioner set aside the LAA's order rejecting GMI's rebate claims in O-in-O No. 6/2006 dated 30-3-2006 and allowed the appeal. Regarding the rebate claims sanctioned by the LAA in O-in-O Nos. 24-27/2005, 30, 31, 33-36/2005, the Commissioner upheld the LAA's decision, rejecting the Revenue's appeals. The Commissioner disposed of the appeals accordingly, providing a detailed analysis and legal reasoning for each decision.