2018 (12) TMI 1793 - CGOVT - Central Excise

Rebate of Central Excise duty paid on exported goods - sale proceeds received was lower than what was declared in the ARE-Is, the Maritime Commissioner reduced the rebate claims proportionately - Rule 18 of Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - HELD THAT - The Government has examined the matter and it is observed that the rebate of duty is sought to be linked with the realization of foreign currency from the overseas buyer and not to the actual duty amount paid by the applicant on the exported goods. But no authentic reason is given by the lower authority in his Order for reducing the amount of rebate of duty in the above discussed situation on the basis of actual realization. In revision application also no legal authority has been cited to support the case that rebate claims can be reduced in the above stated circumstance. In Rule 18 of Central Excise Rules, 2002 and Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 also, which are governing provisions for rebate of duty, it is nowhere stipulated that rebate of duty will be sanctioned by taking into account the amount of export proceeds realized by the exporter. Even Excise Manual of Supplementary Instruction, 2005 does not mention any such condition. In fact the realization of export proceeds itself is not a pre-condition for sanctioning of rebate of duty and, therefore, lesser realization of export proceeds cannot be a criterion for reducing the rebate claim. Thus, the Government does not agree with the contentions of the applicant that the Commissioner (Appeals) has committed an error by allowing the appeal of the respondent and by allowing the rebate of duty to the respondent for full duty paid on exported goods - revision dismissed.

Summary

Issues involved:
Challenge to order-in-appeal allowing rebate claims under Rule 18 of Central Excise Rules, 2002 based on reduced sale proceeds received for exported goods.

Detailed Analysis:

1. Background of the Case:
The Revision Application was filed by the Commissioner of Central Excise, Kolkata against the Order-in-Appeal allowing rebate claims by M/s. Sesa International Ltd. under Rule 18 of Central Excise Rules, 2002. The rebate claims were challenged due to the reduced sale proceeds received for the exported goods.

2. Contentions of the Parties:
M/s. Sesa International Ltd. filed rebate claims based on duty paid on exported goods, but the Maritime Commissioner reduced the rebate claims proportionately due to lower sale proceeds received. The Department contended that the order-in-appeal allowing the rebate claims was erroneous based on the reduced sale proceeds.

3. Legal Analysis:
The Government examined the matter and observed that the rebate of duty sought to be linked with the realization of foreign currency from the overseas buyer, not the actual duty amount paid. The lower authority did not provide an authentic reason for reducing the rebate based on actual realization. The relevant provisions, including Rule 18 of Central Excise Rules, 2002 and Notification No. 19/2004-C.E. (N.T.), do not stipulate linking rebate with export proceeds realization. The Excise Manual also does not mention such a condition, making export proceeds realization not a pre-condition for rebate sanctioning.

4. Decision:
The Government disagreed with the Department's contention that the Commissioner (Appeals) erred in allowing the rebate claims. As per the analysis of the governing provisions, the realization of export proceeds is not a criterion for reducing rebate claims. Therefore, the revision application challenging the order-in-appeal was rejected.

In conclusion, the judgment upheld the order-in-appeal allowing the rebate claims by M/s. Sesa International Ltd., emphasizing that the rebate of duty should not be linked to the realization of export proceeds and that the duty paid on exported goods should be the basis for rebate sanctioning under the relevant provisions.