2018 (4) TMI 1654 - CGOVT - Central Excise

Rebate of duty - rejection on the ground that the applicant had availed drawback of duty as well as rebate of duty in respect of inputs used in the exported goods and, therefore, the drawback of duty will not be admissible to the applicant by virtue of para 7(e) of N/N. 68/2007-Cus. (N.T.), dated 16-7-2007 - Held that - The Government fully agrees with the applicant that while availment of rebate of duty on inputs used in the manufacturing of exported goods is a disqualification for availment of the drawback of duty under Drawback Rules, availment of drawback per se is not a disqualification for availment of rebate of duty under Rule 18 of Central Excise Rules or Notification No. 21/2004-C.E. Moreover, the applicant has claimed to have paid the drawback of duty amount along with interest to the Custom House, Kolkata and thereby it cannot be stated that double benefit will be available to the applicant in the event of grant of rebate of duty in respect of the inputs. The Government is convinced that the Commissioner (Appeals) has committed an error by rejecting the appeal of the applicant in accordance with para 7(e) of N/N. 68/2007 - revision application allowed.

Issues involved:
1. Rebate claim rejection based on availing exemption under specific notifications.
2. Denial of rebate claim due to availing benefit of drawback of duty.
3. Applicability of Drawback Rules in relation to rebate of duty.
4. Compliance with legal provisions and previous government orders.
5. Judicial discipline breach by lower authorities.

Detailed Analysis:

1. The applicant filed a rebate claim for Excise duty paid on inputs used in manufacturing exported goods, which was rejected by the adjudicating authority citing procurement from a manufacturer who availed specific exemptions. The appeal with the Commissioner was also dismissed. However, a Revision Application was allowed subject to certain conditions. The claim was rejected again on the ground of availing drawback of duty, leading to the present Revision Application challenging the rejection based on the contention that availing drawback is not a disqualification for claiming rebate under relevant notifications.

2. The Government examined the matter and observed that the denial of rebate was based on the applicant availing both drawback and rebate of duty on inputs used in exported goods. The applicant argued that the admissibility of rebate is governed by specific Central Excise Rules and notifications, not Drawback Rules. The Government found this argument legally sound, noting no objective basis to apply Drawback Rules conditions. It was highlighted that the lower authorities failed to comply with a previous government order, leading to a breach of judicial discipline.

3. The Government further emphasized that while availing rebate on inputs may disqualify from drawback under Drawback Rules, availing drawback itself does not disqualify from rebate under Central Excise Rules. The applicant's payment of drawback with interest to the Customs Department was noted, ensuring no double benefit. The lack of challenge to the Custom receipt provided by the applicant indicated no revenue loss by granting the rebate. Consequently, the Commissioner's decision to reject the appeal based on a specific condition of Drawback Rules was deemed erroneous.

4. In conclusion, the Government set aside the order-in-appeal and allowed the Revision Application, emphasizing the legal provisions governing rebate claims and the need for authorities to adhere to previous government orders and maintain judicial discipline in decision-making.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and the reasoning behind the decision.

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