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2021 (6) TMI 799 - HC - Central ExciseRebate Claim - export of goods - rebate claims were filed during May, June and July 2009 on the exports made between July 2008 and January 2009 - time limitation - HELD THAT - Even if the petitioner was not entitled to rebate, the petitioner would have been entitled to exclude such goods under bond under Rule 19 of the Central Excise Rules, 2002. The issue is Revenue Neutral. Though, the conduct of the petitioner was no forthright and was intended to defraud the revenue, fact remains that the petitioner has paid back and compensated the revenue by paying the amount to the credit of the Central Government together with interest on 02.02.2009 - The exports are not be burdened with tax liability. The petitioner was not entitled for rebate, the alternative benefit of export under bond without payment of duty under Rule 19 of the Central Excise Rules, 2002 cannot be denied to the petitioner. Considering the fact that the petitioner has squared up the liability and exported the goods and also has received exports proceeds, the impugned orders rejecting the rebate claims cannot be sustained. Penalty for the wrongdoing was the subject matter of the order of the Settlement Commission dated 27.09.2010. It brings curtain down, as far as the wrongdoing is concerned. The settlement commission has not only accepted the case of the petitioner but also awarded a minor penalty of ₹ 10,000/. - there is no scope for denying the refund of the amount which was wrongly debited in advance and paid by the petitioner as was pointed out by the Superintendent of Central Excise vide letter dated 10.11.2008. The petitioner took about three months to pay the amount together with interest. The second respondent/Assistant Commissioner of Central Excise is directed to refund the balance rebate claim together with interest thereon in accordance with law within a period of three months from date of receipt of this order - Petition allowed - decided in favor of petitioner.
Issues:
1. Impugned order dated 29.01.2013 under section 35 EE of the Central Excise Act, 1944. 2. Rejection of rebate claim partially by the respondents. 3. Fraudulent credit made by the petitioner in its CENVAT account. 4. Show Cause Notice issued by the Commissioner of Central Excise. 5. Settlement Commission's order accepting the case of the petitioner. 6. Rejection of rebate claims by the Assistant Commissioner of Central Excise. 7. Appeal before the Commissioner of Central Excise (Appeals). 8. Approach to the Joint Secretary under section 35EE of the Central Excise Act, 1944. 9. Allowance of rebate claim by the Joint Secretary. 10. Refund of balance rebate claim directed by the court. Analysis: 1. The writ petition challenges the order dated 29.01.2013 passed by the Joint Secretary under section 35 EE of the Central Excise Act, 1944. The order affirmed the rejection of the petitioner's appeal against the Order-in-Original No.42 of 2009, partially rejecting the rebate claim amounting to &8377; 87,69,879 out of a total of &8377; 1,23,86,277 claimed by the petitioner. 2. The petitioner had made a fraudulent credit of &8377; 86,73,376 in its CENVAT account between July 2008 to January 2009, debiting this amount as excise duty on exported goods. Subsequently, the petitioner filed seven rebate claims totaling &8377; 1,23,86,277, while having an actual CENVAT credit of only &8377; 12,73,308. The balance amount was debited from the Personal Ledger Account. 3. Upon detection of the mistake, a Show Cause Notice was issued to the petitioner demanding the amount fraudulently credited. The petitioner rectified the error by paying the amount and interest. The Settlement Commission accepted the petitioner's explanation regarding the wrongful credit. 4. The Assistant Commissioner of Central Excise rejected the rebate claims, citing exports made without payment of corresponding duty. The subsequent appeal before the Commissioner of Central Excise (Appeals) was also dismissed, leading to the petition before the Joint Secretary under section 35EE. 5. The Joint Secretary allowed a rebate claim of &8377; 36,16,398 out of the total claimed amount, recognizing the rectification made by the petitioner and the fact that exports were made under bond without tax liability. The court directed the Assistant Commissioner to refund the balance rebate claim with interest within three months. 6. The court emphasized that despite the petitioner's irregularities, the rectification of the mistake, payment of dues, and export of goods under bond without tax liability ensured no loss to the revenue, making the refund of the wrongly debited amount justifiable. 7. The Settlement Commission's order, accepting the petitioner's case and imposing a minor penalty, was highlighted as resolving the penalty aspect of the wrongdoing, further supporting the court's decision to allow the refund of the balance rebate claim.
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