2008 (9) TMI 288 - AT - Central Excise

Refund of additional duty - assessee exported the goods by payment of excise duty which was done by adjusting the basic excise duty which was payable under the Central Excise Act, 1944 for which the rebate claim was made under Rule 18. Rebate is granted of duty paid on the excisable goods as contemplated by Rule 18. No additional excise duty was payable on the final products and therefore, rebate could have been claimed only in respect of the duty paid which has been specific excise duty relatable to Rule 18 read with Section 3 of Central Excise Act, 1944. No application for rebate of additional duty which was paid on the inputs, was, made under Rule 18 read with Section 3 of Additional Duties of Excise (Textile and Textile Articles) Act. Therefore, an application for refund of such additional excise duty by way of Cenvat credit could be made under Rule 5 of CCR by these respondents.

Summary

Issues:
Appeal against refund of Cenvat credit on AED paid on inputs used in the manufacture of exported final product under rebate claim.

Analysis:
The Revenue filed an appeal against the order of the Commissioner (Appeals) regarding the availability of refund of Cenvat credit on AED paid on inputs used in the manufacture of the final product exported under rebate claim under Rule 18 of Central Excise Rules. The Advocate for the Respondent cited precedents where similar issues were settled by the Tribunal and Division Bench. The Tribunal had observed that rebate could only be claimed in respect of the duty paid specifically related to Rule 18, and no application for refund of additional duty paid on inputs was made under the relevant Act. Therefore, the respondents were eligible to claim a refund of such additional excise duty by way of Cenvat credit under Rule 5 of Cenvat Credit Rules.

The learned Joint CDR referred to a judgment by the Hon'ble Bombay High Court, which held that an exporter cannot avail both benefits under rebate claim and refund of duty paid on inputs simultaneously. However, the Tribunal's decision in the case cited by the Advocate highlighted that the rebate was granted for duty paid on excisable goods as per Rule 18, and no additional excise duty was payable on the final products. Therefore, the appeal filed by the Revenue was rejected based on the observations in the previous case, as the respondents were entitled to claim a refund of additional excise duty through Cenvat credit under Rule 5 of Cenvat Credit Rules.

In conclusion, the Tribunal upheld the availability of refund of Cenvat credit on AED paid on inputs used in the manufacture of the exported final product under rebate claim. The decision was based on the specific provisions of Rule 18 and Rule 5 of the relevant Acts, as interpreted in previous judgments, which established the eligibility of the respondents to claim such a refund through Cenvat credit. The appeal filed by the Revenue was dismissed, and the order was dictated and pronounced in the open Court.