2015 (1) TMI 806 - CGOVT - Central Excise

Denial of rebate claim - applicant failed to give declaration regarding non-availment of cenvat credit, availed drawback benefit and as such, availed double benefit of drawback as well as cenvat credit - Held that - appellate authority has'' rued that applicant has availed custom portion of drawback @12%, while they were eligible for drawback @4%. The applicants has contended that the observation of appellate authority is factually incorrect in as much as they claim drawback @4% of value or ₹ 12/- per kg. as value cap, whichever is lower and not @12% of value as observed by the appellate authority. Commissioner (Appeals) has on the one hand accepted that applicant has availed drawback of customs portion and rebate claim was admissible but on the other 'upheld rejection of rebate claim as applicant had availed DBK of custom portion @12% which is factually incorrect as claimed by applicant. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Claim of duty drawback and rebate of excise duty
- Rejection of rebate claim by original authority and Commissioner (Appeals)
- Interpretation of Notification No.68/2011-CUS (NT)
- Allegation of availing double benefit
- Legal correctness of the findings of Commissioner (Appeals)
- Factual correctness of the observation by appellate authority

Analysis:
The case involves a revision application by M/s Tolia Overseas against the rejection of their rebate claim for exporting Forged Steel Balls under the duty drawback scheme. The applicant exported goods under the DEPB Scheme until its withdrawal, after which they switched to claiming duty drawback and rebate of excise duty. The issue arose when the authorities alleged that the applicant availed double benefit by claiming both drawback and cenvat credit without producing a certificate as required by Notification No.68/2011-CUS (NT). The original authority and Commissioner (Appeals) rejected the rebate claim on this ground.

The applicant contended that they claimed drawback rates as per the Notification, i.e., 4% of FOB value or specific caps per kg, whichever is lower, for Alloy Steel and Stainless Steel balls. They argued that the Commissioner (Appeals) erred in presuming they claimed more drawback than due without considering that the drawback was already sanctioned by customs authorities. The applicant also highlighted a clarification by the Chief Commissioner of Central Excise supporting their claim for rebate of excise duty.

The Government's analysis focused on the interpretation of Notification No.68/2011-CUS (NT) regarding the eligibility for drawback when cenvat credit is availed. They referred to a previous case and the Notification itself to establish that if the drawback rates are the same with or without cenvat credit, it pertains only to the customs component, allowing the rebate claim. The Government found the findings of the Commissioner (Appeals) legally correct in this regard.

Regarding the observation by the appellate authority that the applicant availed custom portion of drawback at 12%, the Government determined that the applicant actually claimed drawback at 4% of value or specific caps per kg, whichever is lower, not 12%. Therefore, the impugned order-in-appeal was set aside, and the case was remanded to the original authority for a fresh decision, ensuring the verification of the applicant's claimed drawback of the custom portion only. The concerned parties were to be given a reasonable opportunity of hearing in this process.

In conclusion, the revision application was disposed of with the above terms, as ordered by the Government after a detailed analysis of the issues raised by the applicant and the legal interpretations of the relevant notifications and precedents.