2013 (7) TMI 838 - CGOVT - Customs

Duty drawback - department contended that allowing rebate of duty when drawback of Customs portion was availed will amount to double benefit was not valid Held that - Commissioner (Appeals) had given his detailed findings in the case - Department in their revision applications had not countered even a single argument and simply stated that double benefit of drawback and rebate of duty cannot be allowed - Notification No. 84/2010 provides that customs component of AIR drawback shall be available even if the rebate of Central Excise duty paid on raw material used in the manufacture of export goods has been taken in terms of Rule 18 of Central Excise Rules - if such raw materials were procured without payment of Central Excise duty under Rule 19(2) of the Central Excise Rules - the content of the circular envisage that the Customs component of AIR drawback shall be available even if the rebate of Central Excise duty paid on raw materials used in manufacture of exported goods had been taken in terms of Rule 18 of Central Excise Rules - The position is made amply clear in the Notification No. 84/2010 decided against revenue.

Summary

Issues Involved:
1. Admissibility of rebate of duty paid on exported goods when drawback of customs portion is availed.
2. Simultaneous claim of Cenvat credit and duty drawback.
3. Alleged suppression of facts by exporters regarding claims.

Detailed Analysis:

Issue 1: Admissibility of Rebate of Duty Paid on Exported Goods when Drawback of Customs Portion is Availed

The exporters filed rebate claims under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.), for the duty paid on exported goods. The Assistant/Deputy Commissioner of Central Excise sanctioned some rebate claims but rejected others, arguing that exporters are not entitled to rebate if they also claimed/availed drawback, even of the customs portion only, as it would amount to availing undue double benefits. The Commissioner of Central Excise (Appeals) held that exporters are entitled to rebates along with drawback of the customs portion, even after availing Cenvat credit on inputs used in manufacturing exported goods. The Central Government upheld this view, noting that Notification No. 19/2004-C.E. (N.T.) does not restrict rebate of duty paid on exported goods if the exporter has availed drawback of the customs portion. C.B.E. & C. Circular No. 83/2000-Cus. also supports this, indicating no restriction on granting rebate of duty paid on exported goods even if the customs portion of the drawback is availed.

Issue 2: Simultaneous Claim of Cenvat Credit and Duty Drawback

The department argued that as per the Duty Drawback Rules, drawback is not admissible if Cenvat credit has been availed, and the assessee must certify non-availment of Cenvat credit. However, the exporters contended that they claimed drawback under the All Industry Rate only for the customs portion and not for the Central Excise duty portion. The Central Government noted that the relevant notifications and circulars allow for the customs component of AIR drawback to be available even if the rebate of Central Excise duty paid on inputs is taken. Thus, the simultaneous claim of Cenvat credit and customs portion of the drawback is permissible.

Issue 3: Alleged Suppression of Facts by Exporters Regarding Claims

The department claimed that exporters suppressed facts by not making correct declarations or undertakings, stating no separate claim for rebate of duty or drawback of duty would be made. Exporters argued that there is no prohibition on claiming duty drawback and rebate of duty paid on finished goods under the relevant notifications. The Central Government found that the declarations made by exporters on ARE-1 forms and shipping bills were sufficient and any procedural lapses were condonable. The department's argument of suppression of facts was not substantiated.

Conclusion:

The Central Government upheld the Commissioner (Appeals)'s orders, finding them legal and proper. The revision applications filed by the department were rejected as devoid of merits. The judgment clarified that exporters are entitled to rebate of duty paid on exported goods even if they avail of the customs portion of the drawback, provided they do not claim the Central Excise portion of the drawback.