2014 (12) TMI 819 - CGOVT - Central Excise

Denial of rebate claim - applicant failed to get input output ratio approved in r/o duty paid materials used in the manufacture of final product before its export - violation of the provisions of the Notification No. 21/2004-CE(MT) dated 06-09-2004 - Held that - Government notes that as provision of para 3.2 of part V of Chapter 8 of CBEC Excise Manual of supplementary instructions the input-output norms notified under Export Import policy may be accepted by department unless there are specific reasons for variation. Government also observes that the substantial benefit of rebate of duty paid on inputs cannot be denied due to procedural infirmities-, as long as the goods in question are exported and other parameters are fulfilled. Under such circumstances, Government finds that input-output ratio allowed by jurisdictional Assistant Commissioner subsequent to export may be taken into account and rebate may be allowed accordingly. - Decided in favour of assessee.

Summary

Issues:
Claim for rebate of duty on inputs used in manufacturing export goods without obtaining prior permission from the Assistant Commissioner of Central Excise.

Analysis:
The case involves a revision application filed against an order-in-appeal by M/S Jocund India Limited regarding a claim for rebate of duty on inputs used in manufacturing export goods without obtaining prior permission. The applicants are engaged in the manufacture of drugs & medicines and filed a rebate claim under Notification No.21/2004-CE(NT) in respect of inputs used in the manufacture of their export goods. The original authority observed that the claimant is entitled to rebate only when they have obtained prior permission from the jurisdictional Deputy/Assistant Commissioner of Central Excise. The applicants were alleged to have contravened the provisions of the notification and the CBEC's Excise Manual of Supplementary Instructions. The Commissioner (Appeals) rejected the appeal filed by the applicant, leading to the revision application before the Central Government.

The applicant raised several grounds in the revision application, including the reasonable period between the application for permission and physical clearance for exports, a reminder requesting expeditious action, and the relevance of the date of the request letter for permission. The applicant argued that the rebate claim should be permissible based on the date of the request letter for permission. Personal hearing was held, where the applicant reiterated the grounds of the revision application.

Upon careful review of the case records and the impugned orders, the Government observed that the original authority rejected the rebate claim due to the applicant's failure to get the input-output ratio approved before export, thus violating the notification. However, the Government referred to a previous case and noted that substantial benefit of rebate cannot be denied if other conditions of the notification are complied with. The Government found that the input-output ratio allowed by the jurisdictional Assistant Commissioner subsequent to export should be taken into account, and rebate should be allowed accordingly. As a result, the Government set aside the impugned orders and allowed the revision application, concluding that it succeeds in the mentioned terms.

In conclusion, the Government's decision in this case highlights the importance of complying with procedural requirements for claiming rebates on duty paid inputs used in manufacturing export goods. The case serves as a reminder that substantial benefits should not be denied due to procedural infirmities as long as the goods are exported and other parameters are fulfilled.