2017 (10) TMI 1431 - CGOVT - Central Excise

Rebate of duty on the exported goods - handicrafts - applicant was earlier a hundred per cent EOU and they subsequently opted out of EOU Scheme - duty was paid at the time of debonding of unit - rejection of rebate on the ground that no central excise duty was paid by the applicant as DTA Unit and the duty paid by hundred per cent EOU was paid because it was required to be paid at the time of de-bonding of the unit - Held that - In the instant case the goods had been cleared by a hundred per cent EOU on clearance of goods into DTA in terms of proviso to Section 3 of the Central Excise Act whose status became at par with the duty paid goods available in the market. He has further observed that it is not a case of clearance of excisable goods on payment of excise duty for export under claim of rebate but is a case of export of goods already lying with them as duty paid goods. Rebate of duty on goods initially cleared into DTA but which are subsequently exported is not covered under Rule 18 of CER, 2002 - The Commissioner (Appeals) has correctly observed that earlier payment of duty at the time of de-bonding of goods was made by the applicant as a hundred per cent EOU and not by the applicant as a DTA Unit who actually exported the goods. The different status of the applicant as hundred per cent EOU and as DTA Unit is supported by the very fact that earlier the applicant had different registration and subsequently after de-bonding of the goods the applicant got the earlier registration changed as DTA Unit. It is beyond any dispute that they did not pay any separate duty of excise on the exported goods when these were cleared from their factory under the ARE-1s and thus it cannot be accepted that the applicant exported the goods on payment of Excise duty under duty rebate claims. Accordingly, the applicant is not found eligible for rebate of duty in respect of exported goods simply for the reason that they had earlier paid duty while these were de-bonded from hundred per cent EOU Scheme - revision application rejected.

Summary

Issues:
- Claim for rebate of duty on exported goods rejected by Commissioner (Appeals)
- Eligibility for rebate of duty paid on exported goods
- Interpretation of Rule 18 of Central Excise Rules, 2002
- Distinction between duty paid as a hundred per cent EOU and as a DTA Unit
- Applicability of rebate of duty on goods cleared from hundred per cent EOU

Claim for Rebate of Duty on Exported Goods:
The Revision Application was filed against the Commissioner (Appeals) Order rejecting the applicant's appeal on the rebate of duty on exported goods. The applicant contended that they were eligible for the rebate as they had paid duty on the exported goods upon de-bonding from the hundred per cent EOU scheme. However, the Assistant Commissioner rejected their claims, stating that the duty paid as a hundred per cent EOU was not the same as duty paid by a DTA Unit for exported goods.

Interpretation of Rule 18 of Central Excise Rules, 2002:
The Commissioner (Appeals) upheld the Assistant Commissioner's decision, emphasizing that Rule 18 allows rebate only if duty was paid on excisable goods at the time of clearance for export. In this case, the goods were cleared by a hundred per cent EOU into DTA, and the duty paid during de-bonding was not considered duty paid for export, rendering the rebate inapplicable.

Distinction Between Duty Paid as a Hundred Per Cent EOU and a DTA Unit:
The judgment highlighted the different statuses of the applicant as a hundred per cent EOU and a DTA Unit. It was noted that duty paid during de-bonding was as a hundred per cent EOU, not as a DTA Unit exporting goods. The change in registration from EOU to DTA Unit further supported this distinction.

Applicability of Rebate of Duty on Goods Cleared from Hundred Per Cent EOU:
The applicant's argument that duty paid upon de-bonding from the EOU scheme should qualify for rebate upon export was dismissed. The Government's stance was that duty paid during de-bonding was for clearance of goods in DTA and not specifically for exported goods. As the applicant did not pay separate duty on exported goods, their claim for rebate based on duty paid during de-bonding was deemed ineligible.

Conclusion:
After thorough examination, the judgment found no deficiency in the Commissioner (Appeals) order and deemed the revision application not maintainable. The decision was based on the understanding that duty paid during de-bonding from the EOU scheme did not qualify for rebate on exported goods under Rule 18 of the Central Excise Rules, 2002.