Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2012 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (6) TMI 753 - AT - Central ExciseAvailment of CENVAT Credit - Revenue denied credit on the ground that the exported material is otherwise duty-free - Held that - It is the undisputed policy of the Government not to burden the export goods with domestic taxes as has been noted in various decisions of the Tribunal. The reasons are obvious. We do not want to make domestically produced goods, when exported to foreign market, to become uncompetitive. Secondly, no country wants to export the domestic taxes meant to be levied on domestic consumption of goods and services. Each country either exempts such taxes in respect of export goods, including taxes relating to inputs used in the export goods, or there are alternative schemes for providing rebate, drawback of duties suffered by export goods. India is no exception as we also have similar schemes. There are also schemes making available duty-free goods and services for export production - allowing of input duty credit would free the export goods from domestic taxes. Hence, the impugned order is set aside - Decided in favour of assessee.
Issues:
Claim for input duty credit on exported goods. Analysis: The appellants exported 'Multi Folded Cotton Yarn' and claimed input duty credit for packing material, which was denied by the department. The department argued that the exported material is duty-free, following the government's policy not to burden export goods with domestic taxes. The Tribunal noted that various decisions support this policy to maintain competitiveness in the foreign market and avoid exporting domestic taxes. The Tribunal highlighted that countries typically exempt such taxes on export goods or provide rebate schemes. India follows similar practices, including duty-free goods for export production. Allowing input duty credit would relieve export goods from domestic taxes. Consequently, the impugned order was set aside, and the appeal was allowed, with the stay petition also disposed of. The amount involved in the case was Rs. 19,713. The appellants requested an early hearing of the appeal but also sought an adjournment because their authorized representative from Mumbai needed to argue the case, despite the small amount. The Tribunal, considering the issue straightforward, declined the adjournment request, waived the pre-deposit requirement, allowed the miscellaneous application for early hearing, and proceeded to hear and dispose of the appeal on the same day. In conclusion, the Tribunal's decision favored the appellants by allowing input duty credit on the exported goods. The judgment emphasized the importance of not burdening export goods with domestic taxes to maintain competitiveness in the global market. The decision highlighted the government's policy and various schemes in place to support export production by exempting or providing rebates on domestic taxes for export goods. The judgment set aside the department's denial of input duty credit, allowing the appeal and disposing of the stay petition.
|