2012 (10) TMI 936 - AT - Central Excise

Waiver of pre deposit - Rebate claim under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - Export of ICD - Full amount of export proceeds have not been realized - Held that - Goods cleared from ICD for export were ultimately not exported out of India; or that the proof of export in form of transference copy of the shipping bill was not received - Rebate of duty under Rule 18 of Central Excise Rules, 2002 provides for rebate of duty in respect of export of goods in terms of the conditions and limitations as prescribed under Notifications issued under this rule. Central Government has issued Notification No. 19/2004-C.E. (N.T.) which prescribes conditions subject to which rebate is to be granted in terms of Rule 18 of Central Excise Rules, 2002 and there is no dispute that the exports under rebate claim had been made in terms of the procedure prescribed in this notification. On going through this notification, we find that there is no absolutely no condition providing that grant of rebate is subject to realization of the export proceeds. Moreover, we also find that it is not the department case that export proceeds have not been received at all. The allegation is that export proceeds are less than the exports value declared by the appellant for which explanation given by the Appellant is that this is due to exchange rate fluctuation, which prima facie appears to be correct. In view of this there is prima facie a case in favour of the appellant - Stay granted.

Summary

Issues:
1. Eligibility for rebate under Rule 18 of Central Excise Rules, 2002 based on realization of full export proceeds.

Detailed Analysis:

Eligibility for Rebate under Rule 18:
The case involved the appellant, a manufacturer of stainless steel products, who exported goods under rebate claim under Rule 18 of the Central Excise Rules, 2002. The dispute arose as the Department contended that since the full amount of export proceeds had not been realized, the appellant was not eligible for the rebate. A show cause notice was issued for recovery of rebate, interest, and penalty. The Commissioner upheld the denial of rebate due to non-realization of full export proceeds and imposed a duty demand and penalty. The appellant challenged this decision through an appeal.

Contentions of the Appellant:
The appellant argued that the conditions for rebate under Rule 18 are governed by Notification No. 19/2004-C.E. (N.T.), which does not explicitly require a bank realization certificate as proof of full export proceeds for granting rebate. They highlighted that the issue was a minor difference due to exchange rate fluctuation, asserting that there was no failure in full realization. The appellant sought a waiver of pre-deposit for the appeal, stating a strong prima facie case.

Contentions of the Respondent:
The Joint CDR defended the denial of rebate, citing a Board's Circular requiring full realization of export proceeds for rebate claims under Rule 18. However, the respondent failed to identify any specific provision disentitling the exporter from rebate due to non-realization of export proceeds.

Tribunal's Decision:
Upon reviewing the submissions and records, the Tribunal noted that the Department did not dispute the export of goods or the receipt of proof of export. The central issue was the non-full realization of export proceeds. The Tribunal examined Notification No. 19/2004-C.E. (N.T.) and found no explicit condition mandating full realization for granting rebate. Notably, the appellant's explanation of the discrepancy being due to exchange rate fluctuation appeared valid. Consequently, the Tribunal found a prima facie case in favor of the appellant and granted a waiver of pre-deposit for duty demand, interest, and penalty pending appeal.

Conclusion:
The Tribunal allowed the stay application, permitting the appeal to proceed. The decision highlighted the absence of a specific requirement in the governing notification for full realization of export proceeds to qualify for rebate under Rule 18. The Tribunal's analysis favored the appellant's position, emphasizing the validity of the exchange rate fluctuation explanation for the discrepancy in export proceeds.