2017 (12) TMI 1748 - CGOVT - Central Excise

Rebate of duty - export of Endothermic Gas Generator and export of imported parts/components of Hosiery knitting Needle manufacture machines - Cenvat credit against CVD reversed as per Rule 3(5A) of the Cenvat Credit Rules 2004 - rebate was rejected by the jurisdictional Deputy Commissioner on the ground that the goods are not excisable goods no duty of excise has been paid and Cenvat credit has been reversed at the time of clearance from the factory as required under the Cenvat Credit Rules 2004. HELD THAT - The applicant has not paid any Excise duty on the generator and knitting machines and there is no export of excisable goods. Consequently the primary condition of export of duty paid excisable goods is not established in this case and thus the orders of Commissioner (Appeals) cannot be faulted on this ground. As regards the applicant s argument that they could export the above goods under Bond as per para 3 of Chapter 5 of the C.B.E. C. Manual this proceeding does not have any such issue and the subject matter of the Revision Applications is only whether rebate of duty is admissible in this case or not. Further such reversal of credit was mandatory even if the goods were exported under Bond and therefore this issue is of no relevance here. Revision application rejected.

Summary

Issues:
1. Rebate of duty claimed on export of imported goods.
2. Eligibility for rebate under Notification No. 19/2004-C.E. (N.T.).
3. Interpretation of Rule 18 and Notification No. 19/2004.
4. Reversal of Cenvat credit and payment of Central Excise duty.
5. Export of goods under Bond.
6. Applicability of case laws on duty paid on export of capital goods.

Analysis:
1. The Revision Applications were filed against the rejection of rebate claims on the export of an Endothermic Gas Generator and imported parts of Hosiery knitting Needle manufacture machines. The applicant exported these goods after reversing Cenvat credit as per Cenvat Credit Rules, 2004. The jurisdictional Deputy Commissioner rejected the claims as the goods were not excisable, no excise duty was paid, and Cenvat credit was reversed at clearance. The Commissioner (Appeals) upheld the rejections, leading to the Revision Applications.

2. The main issue was whether the applicant exported excisable goods after paying Central Excise duty. However, as the goods were imported and not manufactured in India, no excise duty was paid or levied. The reversal of Cenvat credit at export was a compliance with Cenvat Credit Rules, not a payment of excise duty. The applicant was aware of this liability and reversed the credit accordingly. The goods being imported, no excise duty was applicable, and the primary condition of exporting duty-paid excisable goods was not met.

3. The applicant's argument to export goods under Bond was deemed irrelevant as the issue was solely about the admissibility of rebate. The case laws cited by the applicant were found irrelevant as they pertained to duty paid on the export of imported capital goods, which was not the case here. The absence of excise duty payment on the imported goods precluded the eligibility for rebate under Rule 18 and Notification No. 19/2004.

4. The Commissioner (Appeals) rejected the Revision Applications, finding no deficiency in their orders. The applications were dismissed, affirming the decision that no excise duty was paid on the exported goods, rendering them ineligible for rebate. The reversal of Cenvat credit was a procedural compliance and not equivalent to payment of Central Excise duty.