2008 (7) TMI 286 - HC - Central Excise

Claim for rebate of duty paid on export of exempted goods - once the duty is validly levied in accordance with the provisions of the statute, the said levy does not disappear or cannot get obliterated merely because by virtue of a notification, partial or full exemption is granted held that rebate is admissible moreover, revenue plea of treating the duty paid as deposit is not supported by any provision - petition of revenue does not merit acceptance and is rejected

Summary

Issues:
- Challenge to the legality and validity of an order rejecting rebate claimed by the assessee.
- Interpretation of Rule 12 of the Central Excise Rules, 1944 regarding rebate of duty on exported goods.
- Dispute over whether an assessee can claim rebate without availing exemption granted under a notification.

Detailed Analysis:

1. The petition was filed challenging the order rejecting the rebate claimed by the assessee, engaged in manufacturing goods for export. The dispute arose as the authorities contended that the assessee cannot pay duty on exempted goods and must comply with the conditions of the notification granting exemption. The Appellate Authority upheld this position based on Circulars issued by the Central Board of Excise & Customs (CBEC).

2. The assessee challenged the Appellate Authority's decision through a Revision Application before the Government of India, which allowed the revision. The revisional authority emphasized that an exemption notification does not erase the duty, and an assessee cannot be forced to avail of an exemption. The authority also highlighted the precedence of Tribunal decisions over CBEC Circulars in case of conflict.

3. The central issue revolved around whether an assessee exporting goods subject to duty can claim rebate without utilizing the exemption provided under a notification. Rule 12 of the Central Excise Rules outlines the grounds for denying rebate, but no provision allows authorities to reject a rebate claim based on the duty being treated as a deposit.

4. The revisional authority's decision was supported by legal principles stating that duty levied under the statute remains even if an exemption notification is in place. The assessee has the option to pay duty at the prescribed rate or the rate specified in the exemption notification. The High Court found no legal error in the revisional authority's decision warranting its intervention.

5. Ultimately, the High Court rejected the petition, emphasizing that the revisional authority's decision did not raise any legal issues necessitating the Court's intervention. The Court concluded that the assessee was entitled to the rebate claimed, and there was no legal basis to deny it. The petition was dismissed with no order as to costs.

By analyzing the judgment, it is evident that the dispute centered around the interpretation of Rule 12 of the Central Excise Rules and the entitlement of the assessee to claim rebate on exported goods without availing the exemption provided under a notification. The High Court upheld the revisional authority's decision, emphasizing the legal principles governing duty payment and exemption notifications in excise matters.