2013 (9) TMI 727 - Commissioner - Central Excise

Rebate Claim under Rule 18 of the CE Rules 2002 - whether process of repacking is a manufacturing activity - Mosquito Repellant Liquid - Whether denial of rebate of duty paid on the goods exported was correct - Held that - The goods were exported as combi-packs - Section 2(f)(iii) states that manufacture includes any process in relation to the goods specified in third schedule involves packing - There was force in the appellant s argument that as the said goods were repacked in combi-packs, it amounts to manufacture and they were eligible for rebate - Moreover, in the case of Om Sons Cookware P. Ltd. 2011 (1) TMI 814 - GOVERNMENT OF INDIA Rebate/drawback were Export Oriented Schemes and unduly restricted and technical interpretation of procedure to be avoided - Liberal interpretation should be given when substantive fact of export was not doubted - Further, it was policy of the Government that the domestic duty shall not be exported - In short, whatever duty was paid by the exporter had to be paid back so as to encourage them - the appellant was eligible for rebate order set aside 0 Decided in favour of Assessee.

Summary

Issues: Denial of rebate claim on exported goods due to alleged lack of manufacturing activity.

Analysis:
The case involved an appeal filed by M/s. Godrej Sara Lee Limited against the Order-in-Original passed by the Maritime Commissioner of Central Excise, Chennai. The appellant had filed rebate claims for goods exported, including Mosquito Repellant Machine and Liquid. The issue arose when it was found that the Mosquito Repellant Machine, imported under Advance Licence, had not undergone manufacturing activity. The Lower Adjudicating Authority allowed rebate only for the manufactured Mosquito Repellant Liquid, rejecting the claim for the imported Mosquito Repellant Machine.

The appellant contested this decision on various grounds, including that the rebate claimed represented duty paid on the exported goods, and that the goods were exported as combi-packs. They also cited a Board circular and legal precedents to support their claim for rebate. During the hearing, the appellant's advocate argued that the exported goods, being repacked in combi-packs, amounted to manufacture under Section 2(f)(iii) of the Central Excise Act, making them eligible for rebate of the duty paid.

Upon review, the Commissioner found that the goods were indeed exported as combi-packs, and that repacking them constituted a manufacturing process as per the Act. Citing a legal precedent, the Commissioner emphasized the need for a liberal interpretation in export-oriented schemes and policies to encourage exporters. Therefore, the Commissioner held that the appellant was eligible for the rebate claim and set aside the impugned order, allowing the appeal.

In conclusion, the judgment resolved the issue of denial of rebate claim on exported goods by recognizing the repacking of goods as a manufacturing process, thereby upholding the appellant's eligibility for the rebate. The decision underscored the importance of supporting exporters and avoiding unduly restrictive interpretations in export-related matters.