2017 (9) TMI 1790 - CGOVT - Central Excise

Rebate of duty - CVD paid on imported inputs which were used in the manufacturing of exported tractors - Held that - There is no dispute in this case relating to the fact that the applicant has imported some of the inputs on payment of additional duty of Customs, i.e. countervailing duties (CVD), and the same were used in the manufacturing of exported tractors. There is also no doubt that N/N. 21/2004 provide for rebate of duty in respect of CVD also as the word duty for the purpose of paying rebate claim is defined to include even the CVD. These facts are expressly accepted by Commissioner (Appeals) also in his order - However, still, the applicant is not allowed rebate of duty in respect of CVD for the reason that they have imported the inputs directly and did not obtain imported materials from the registered factory or from dealers under the excise invoices as is prescribed in para 3 of N/N. 21/2004. For getting rebate of duty under N/N. 21/2004 procurement of materials from a registered manufacturer or a dealer is essential and this para does not provide for obtaining of material from any other source, including direct import of the goods. Thus under N/N. 21/2004 it is implicit that procurement of material by a manufacturer directly by importing goods is not authorized for the purpose of getting rebate of duty on the inputs used in the exported goods. The applicant has not come forward with any reasoning or a grounds to how the clear text of para 3 of the N/N. 21/2004 which is a sole basis for denial of rebate claim to them can be overlooked. The Government considers that the Commissioner (Appeals) has not committed any error while passing Order-in-Appeal - revision application dismissed.

Summary

Issues:
- Revision of Commissioner (Appeals)'s Order regarding rebate of duty on imported inputs used in manufacturing exported tractors.
- Interpretation of Notification No. 21/2004-C.E. (N.T.) and its applicability to the case.
- Procurement requirements for obtaining rebate of duty under Notification No. 21/2004.
- Legal interpretation of the provision for obtaining materials from a registered factory or dealer for rebate claim.

Analysis:
1. The Revision Applications were filed against the Commissioner (Appeals)'s Order rejecting the rebate claim of duty on Countervailing Duty (CVD) paid on imported inputs used in manufacturing exported tractors. The applicant based their revision on the interpretation of Notification No. 21/2004-C.E. (N.T.) and Supreme Court decisions emphasizing liberal interpretation of beneficial provisions.

2. The case was examined in light of the revision applications, orders-in-original, and Notification No. 21/2004. It was noted that the applicant imported inputs on which CVD was paid and used them in manufacturing. While the Commissioner (Appeals) acknowledged the eligibility for rebate of CVD, the claim was denied as the inputs were directly imported and not procured from a registered factory or dealer as required by para 3 of the Notification.

3. Para 3 of Notification No. 21/2004 mandates procurement of materials from a registered manufacturer or dealer for obtaining rebate under the notification. The applicant failed to provide any justification for bypassing this requirement. The literal interpretation principle was emphasized, stating that the provision clearly restricts obtaining materials directly from imports for claiming rebate under the notification.

4. The Government affirmed that the Commissioner (Appeals) did not err in rejecting the rebate claim, as the applicant did not adhere to the procurement requirements specified in para 3 of Notification No. 21/2004. The judgment highlighted the policy aspect and the explicit restriction in the provision, concluding that the revision applications were not maintainable based on the lack of compliance with the procurement conditions for rebate eligibility.

This detailed analysis of the judgment outlines the issues raised, the legal interpretation of relevant provisions, and the reasoning behind the decision to uphold the Commissioner (Appeals)'s Order regarding the rebate claim on imported inputs for manufacturing exported tractors.