2013 (11) TMI 378 - CGOVT - Central Excise

Rebate claim Assessee filed rebate claims by preparing Central Excise invoices and debiting excise duty in their Cenvat credit accounts for export of goods manufactured at their other units - Claims rejected u/s 11B read with Rules 4 and 18 of Central Excise Rules, 2002 and Notification No. 19/2004 - Duty paid from accumulated Cenvat credit for the goods manufactured and exported by other unit cannot treated as duty paid in terms of Central Excise Law Held that - The availment and utilization of accumulated Cenvat credit of one unit against payment of duty liability of another unit cannot said to be proper payment of duty - the applicants had option to clear goods without payment of duty under Rule 19 of Central Excise Rules, 2002 instead of Rule 18 of the said Rules - No duty was paid on the exported goods in the factory of their manufacture - The duty said to be paid by applicant at their Neelambur Unit by issuing Central Excise invoice for goods manufactured and exported from other units cannot be treated as duty paid on the exported goods. The fundamental condition for determining admissibility of rebate claim is that duty paid goods are exported out of India - the duty paid nature of goods is not established - Thus rebate claim are not admissible under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004 - the rebate claims are rightly rejected by the lower authorities - Applicant s Neelambur Unit has not manufactured the goods - thus the payment of duty by debiting their cenvat credit account has become an excess payment which has to be treated as voluntary deposit with Government - There is no authority to retain excess paid amount - excess paid amount may be allowed to be recredited in their Cenvat credit account Order partially modified Decided partly in favour of Assessee.

Summary

Issues:
- Admissibility of rebate claims under Central Excise Law
- Interpretation of Notification No. 19/2004-C.E. (N.T.)
- Proper payment of duty for exported goods
- Rejection of rebate claims by lower authorities
- Request for recrediting excess paid amount in Cenvat credit account

Admissibility of Rebate Claims:
The applicants, engaged in manufacturing cotton yarn and fabrics, filed rebate claims for goods exported from their units. The dispute arose as the duty paid from accumulated Cenvat credit for goods manufactured and exported by other units was deemed inadmissible under Section 11B of the Central Excise Act, 1944. The original authority and Commissioner (Appeals) rejected all claims, citing non-compliance with Central Excise Law provisions.

Interpretation of Notification No. 19/2004-C.E. (N.T.):
The applicants argued that the duty paid from one unit for goods exported from another unit, all belonging to the same entity, should qualify for rebate under the notification. They contended that the goods were exported directly from a registered factory, meeting the conditions of the notification. However, the authorities emphasized the necessity of duty payment and export from the same unit, leading to the rejection of rebate claims.

Proper Payment of Duty for Exported Goods:
The government highlighted the requirement for duty-paid goods to be exported out of India for rebate claim admissibility. It was determined that duty payment by debiting Cenvat credit from a unit not manufacturing the goods did not establish the duty-paid nature of the exported goods. Consequently, the lower authorities rightfully rejected the rebate claims under Central Excise Rules and the relevant notification.

Rejection of Rebate Claims by Lower Authorities:
The government affirmed that separate registration mandates separate compliance with Central Excise procedures for each unit, regardless of ownership. Utilizing accumulated Cenvat credit from one unit to pay duty for goods manufactured and exported by other units was deemed improper. The rejection of rebate claims was upheld based on the lack of duty payment on the exported goods at their respective manufacturing units.

Request for Recrediting Excess Paid Amount:
In light of the excess duty payment from the Neelambur Unit, not manufacturing the exported goods, the government directed the recrediting of the excess paid amount in the Cenvat credit account. The excess payment was considered a voluntary deposit with the government, warranting recrediting. The revision applications were partially successful in this regard, leading to the modification of the impugned orders-in-appeal.

The judgment clarified the legal intricacies surrounding rebate claims, duty payment, and compliance with Central Excise Law provisions, ultimately providing a detailed analysis of each issue raised by the applicants.