2019 (12) TMI 1385 - CGOVT - Central Excise

Rebate claim - rebate was allowed by partially restricting the rebate amount as per C.B.E. C. s Circular No. 129/40/95-CX., dated 29-5-1995 - rebate restricted on the material used in the manufacture of export goods - HELD THAT - In N/N. 21/2004-C.E. (N.T.), dated 6-9-2004, it is clearly mentioned that the rebate of whole of duty shall be payable to the exporter subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. It is observed that the applicant removed the scrap generated during the manufacture of the export goods on payment of duty. The Notification further provides for the verification of input-output ratio by the jurisdictional Excise authorities - In the instant case, the required verification of the input-output has also been done and due permission was granted by the Excise authorities to manufacture and export the finished goods - The notification nowhere specifies that the entire quantum of duty paid inputs have to be physically contained in the export goods to be eligible for rebate. As per the notification, material should be used in manufacture or processing of export goods and the waste should be cleared on payment of duty. Reliance of the adjudicating authority on C.B.E. C. Circular No. 129/40/95-CX., dated 29-5-1995 pertaining to the erstwhile Central Excise Rules, 1944 is farfetched since these rules have been subsequently replaced by Central Excise Rules, 2002. Moreover, this circular pertains to Notification No. 42/94-C.E. (N.T.), dated 22-9-1994 and cannot be made applicable to Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 issued under the Central Excise Rules, 2002. Revision application allowed.

Summary

Issues:
- Rebate claims filed by M/s. Shivagrico Implements Ltd. in respect of duty paid on inputs used in the manufacture of export goods.
- Denial of rebate on waste material by the adjudicating authority.
- Appeal rejection by the Commissioner (Appeals).
- Delay in filing Revision Application No. 195/01/18-RA.
- Applicability of C.B.E. & C. Circular No. 129/40/95-CX.
- Interpretation of Rule 18 of the Central Excise Rules, 2002 and Notification No. 21/2004-C.E. (N.T.).
- Relief granted by Commissioner (Appeals), Jaipur and Udaipur in subsequent claims.

Analysis:

The case involved M/s. Shivagrico Implements Ltd. filing rebate claims for duty paid on inputs used in exporting goods under Rule 18 of the Central Excise Rules, 2002. The adjudicating authority partially sanctioned the rebate claims, citing C.B.E. & C. Circular No. 129/40/95-CX. The Commissioner (Appeals) rejected the appeals, leading to the Revision Applications. The applicant argued that the rebate on waste material was wrongly denied, as they cleared waste on duty payment, and cited favorable court decisions. The delay in filing Revision Application No. 195/01/18-RA was condoned under Section 35EE(2) of the Central Excise Act, 1944.

The issue of rebate denial on waste material stemmed from the application of C.B.E. & C. Circular No. 129/40/95-CX., dated 29-5-1995 by the adjudicating authority. However, the Circular was related to erstwhile rules and was not directly applicable to Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 under the Central Excise Rules, 2002. The Notification allowed rebate on materials used in export goods, including waste cleared on duty payment.

The Notification specified conditions for rebate eligibility, emphasizing the use of materials in manufacturing or processing export goods and clearing waste on duty payment. The orders-in-appeal were set aside, and the Revision Applications were allowed based on the Notification's provisions. The applicant was directed to file rebate claims with the relevant Central Excise authorities for further review in accordance with the law.

The judgments by Commissioner (Appeals) in Jaipur and Udaipur granting relief to the applicant in subsequent claims highlighted the inconsistency in applying Circular No. 129/40/95-CX. The decision to set aside the orders-in-appeal and allow the revision applications was based on the correct interpretation of Rule 18 and Notification No. 21/2004-C.E. (N.T.), ensuring the applicant's right to claim rebates on inputs used in export goods, including waste material cleared on duty payment.