2013 (8) TMI 538 - CGOVT - Central Excise

Rebate claim - Revenue was of the view that the exported goods were fully exempted from duty, the assesse can neither pay any duty on the same nor avail Cenvat credit on inputs used in the manufacture of exempted products - Held that - Assesse was not eligible for grant of input rebate claim - Assesse had not followed the prescribed procedure at all and also availed the Cenvat credit on inputs - The original adjudicating authority had rejected the claim of the assesse on the ground that the goods were fully exempted from duty vide Notification No. 4/2006- C.E. (N.T.) and therefore by virtue of sub-rule (1) of Rule 6 of Cenvat Credit Rules, 2004 the assesses were not entitled for Cenvat credit on inputs used in manufacture of exempted goods - for availing rebate of duty paid on material used in exported goods, assesse had follow the procedure laid down in the Notification No. 21/2004-C.E. - the input rebate was admissible if the Cenvat credit was not availed on the inputs revision application Rejected. - Decided against the assessee.

Summary

Issues:
Claim of rebate on duty paid on exported goods exempted from duty under Notification No. 4/2006-C.E., Cenvat credit eligibility on inputs used in manufacture of exempted goods, procedural mistakes in export documentation, condonation of procedural errors for rebate claim, legality of Commissioner (Appeals) order, grant of rebate under Central Excise Act, 1944 and relevant Rules.

Analysis:
1. The revision application was filed against the order-in-appeal rejecting rebate claim on exported exempted goods due to ineligibility for Cenvat credit on inputs used in their manufacture. The applicant exported exercise books fully exempted from duty under Notification No. 4/2006-C.E. The rejection was based on Rule 6 of Cenvat Credit Rules, 2004, disallowing credit on inputs used in exempted goods.

2. The applicant contended that procedural errors were committed by both the department and themselves, requesting condonation of such mistakes for rebate claim. They argued that the duty payment was revenue-neutral as Cenvat credit was reversed, making them eligible for rebate on duty paid on inputs used in the exported goods. The Commissioner (Appeals) rejected this argument, upholding the original order.

3. The government noted specific provisions for refund/rebate under the Central Excise Act, 1944 and Rules, emphasizing compliance with Notification No. 21/2004-C.E. (N.T.) for input rebate claims. The applicant's failure to follow this procedure and avail Cenvat credit on inputs rendered them ineligible for the rebate claim. The case laws cited were deemed inapplicable due to differing factual circumstances.

4. The government upheld the order-in-appeal, stating that the duty paid on the exported goods exempted under Notification No. 4/2006-C.E. was not admissible for rebate as it was not considered duty under the Central Excise Act. The applicant's non-compliance with the prescribed procedure for input rebate under Notification No. 21/2004-C.E. (N.T.) further disqualified them from the claim.

5. Consequently, the revision application was rejected for lacking merit, affirming the legality of the order-in-appeal. The government found no infirmity in the decision and upheld the denial of the rebate claim.

This detailed analysis covers the issues raised in the legal judgment, including the eligibility for rebate, procedural errors, compliance with relevant rules, and the final decision of the government rejecting the revision application.