2014 (2) TMI 55 - CGOVT - Central Excise

Rejection of rebate claim - Short duty paid - Abatement of duty of 12 days sought by the applicant was lesser than the mandatory continues period of 15 days required for abatement eligibility under Rule 10A of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - Held that - Government further notes that same jurisdictional Assistant Commissioner of Central Excise, Division-I, Central Excise Commissionerate, Delhi-I issued another Show Cause Notice dated 24-11-2009, where in differential duty of Rs. 4,83,871/- (12,00,000-7,66,129/-) short paid by the applicant was demanded on the identical ground, as of ground of rejection of impugned rebate claim. This Show Cause Notice of dated 24-11-2009 was decided by jurisdictional Assistant Commissioner vide Order No. 06/2010-11 dated 30-4-2010 in the favour of applicant by dropping demand of duty on the ground that the party had rightly paid amount of Rs. 7,66,129/- on pro rata basis for the month of March, 2009 (from 13-3-2009 to 31-3-2009). Government finds that once the payment of duty pro rata basis for relevant month has been held as correct by jurisdictional Assistant Commissioner. Order dated 30-4-2010 has no relevance on impugned case of rejection of rebate claim. Government do not agree with this observation of Commissioner (Appeals). Once, the show cause notice issued for recovery of short payment of duty on the identical ground as of ground of rejection of rebate claim has been dropped by the jurisdictional authority and the same has attained its finality, as no appeal had been preferred against the said order dated 30-4-2010 by the department. As such the duty paid in respect of exported goods has been held as valid duty. Hence, the impugned orders suffer from this legal infirmity and liable to be set aside. The rebate claim of duty paid on exported goods is admissible to the applicant and same may be sanctioned in terms of Notification No. 32/2008-C.E. (N.T.), dated 28-8-2008 r/w Rule 18 of Central Excise Rules, 2002 provided the rebate claim is in order otherwise - Decided in favour of assessee.

Summary

Issues:
1. Rejection of rebate claim by the original authority.
2. Appeal rejection by the Commissioner (Appeals).
3. Revision application filed before the Central Government.

Issue 1 - Rejection of Rebate Claim:
The case involved M/s. M.R. Tobacco Pvt. Ltd. filing a rebate claim for exported Gutkha pouches. The original authority rejected the claim as the duty paid was Rs. 7,67,000 instead of the required Rs. 12,50,000 for one FFS Machine for March 2009. The rejection was based on the applicant's claim of abatement for the first 12 days of March, which was deemed insufficient under Rule 10A of the Pan Masala Packing Machines Rules. The rejection was upheld by the Commissioner (Appeals).

Issue 2 - Appeal Rejection by Commissioner (Appeals):
The applicant appealed the original authority's decision before the Commissioner (Appeals), who also rejected the appeal. The applicant argued that Rule 10 of the Pan Masala Rules was not applicable to them as they were a new manufacturer. They contended that duty paid on a proportionate basis was correct under the fourth proviso to Rule 9. The applicant also cited a clarificatory notification by the Central Government, asserting that duty paid correctly for the production period should allow for the rebate claim.

Issue 3 - Revision Application Before Central Government:
The applicant then filed a revision application before the Central Government under Section 35EE of the Central Excise Act, 1944. The Central Government reviewed the case records and noted that the rejection of the rebate claim was primarily due to the part payment of duty and abatement period not meeting the required 15 days under Rule 10A. Notably, the same jurisdictional Assistant Commissioner had previously dropped a demand for duty on similar grounds, indicating inconsistency in decisions. The Central Government found that the rejection of the rebate claim on the same grounds was not sustainable, especially considering the previous decision that the duty paid was valid. Consequently, the Central Government set aside the impugned Order-in-Appeal and allowed the revision application, sanctioning the rebate claim in accordance with the relevant rules.

In conclusion, the Central Government found in favor of the applicant, highlighting inconsistencies in the decisions and upholding the validity of the duty paid for the exported goods, leading to the allowance of the rebate claim.