2014 (5) TMI 872 - HC - Central Excise

Rebate under Rule 18 of the Central Excise Rules, 2002 - whether, in the given circumstances where the petitioner had not deposited the excise duty prior to the export of goods, the petitioner would be entitled to rebate under Rule 18 of the Central Excise Rules, 2002, on the goods exported by it - Held that - petitioner has paid the excise duty on the automotive parts that were exported, albeit after the goods were so exported - since there was some delay in payment of duty, the petitioner had also paid interest on the same. It is, therefore, contended that the petitioner should not be deprived of the benefit of rebate on duty under Rule 18, which is available where duty paid goods are exported. One of the conditions for grant of rebate under Rule 18 of Central Excise Rules is that the excisable goods be exported after payment of duty. - discharging the liability to pay Excise Duty in the manner as provided under Rule 8 of the Central Excise Rules cannot be construed as compliance of the conditions for availing rebate under Rule 18 of the said Rules. Sub rule (3) of Rule 8 of the Central Excise Rules only provides for payment of interest if Excise Duty is not deposited within the specified time, however, payment of interest on delayed payment after the goods have been cleared cannot be construed to mean that the condition of payment of duty prior to the export of goods has been complied. - Decided against assessee.

Summary

Issues:
- Entitlement to rebate under Rule 18 of the Central Excise Rules, 2002 when excise duty is paid after exporting goods.

Analysis:
1. The petitioner sought to set aside an order upholding the rejection of their rebate claim under Rule 18 of the Central Excise Rules, 2002. The controversy revolved around whether the petitioner, who exported goods without prior excise duty payment, could claim rebate under Rule 18.

2. The petitioner, engaged in manufacturing automotive parts, exported goods without paying excise duty upfront. Subsequently, the duty was paid, and a rebate claim was filed. However, the claim was rejected as duty payment post-export did not comply with Rule 18 conditions.

3. The Court examined Rule 18, which allows rebate subject to specified conditions. The Revenue highlighted Notification No. 19/2004-Central Excise (N.T.), emphasizing the requirement for duty payment before export as a condition for rebate eligibility.

4. Despite the petitioner's argument that excise duty was paid with interest as per Rule 8, the Court held that payment after goods export did not fulfill Rule 18 conditions. The Court cited precedents emphasizing strict adherence to tax statutes without room for interpretation benefiting the taxpayer.

5. The Court agreed with the Revenue that payment under Rule 8 did not align with Rule 18 rebate conditions. Payment of interest for delayed duty did not equate to compliance with duty payment prior to export, as mandated by Rule 18.

6. Consequently, the Court dismissed the writ petition, upholding the rejection of the rebate claim. The judgment emphasized the importance of strict compliance with statutory provisions, denying rebate based on equitable considerations and affirming the necessity to meet explicit conditions for entitlement.

This detailed analysis outlines the legal judgment's core issues, arguments presented, statutory interpretations, and the Court's decision, providing a comprehensive overview of the case's intricacies and the reasoning behind the final verdict.