1992 (10) TMI 82 - SC - Central Excise

Whether rebate is admissible only in respect of the central excise duty paid on the finished products and not on the raw material going into the manufacture of finished products and that therefore the claim has got to be restricted to the actual amount of duty paid at the time of clearance of the finished products from the factory for export? Held that - The learned counsel had not relied on any notification issued under this Rule for claiming rebate on the duty paid on the raw materials used in the manufacture of goods exported. In the absence of any Notification under Rule 12A the assessee cannot get that relief under the Notification made under Rule 12. In this view it makes no difference whether the billets had suffered any duty or not. There are no grounds to interfere with the orders of the Tribunal and appeal dismissed.

Summary

Issues:
- Interpretation of Notification No. 197/62 for rebate of excise duty on exported goods.
- Eligibility of rebate on duty paid for raw materials used in manufacturing finished products.
- Application of Rule 12A for rebate on excisable materials used in exported goods.

Analysis:

1. The case involved appeals under Section 35-L of the Central Excises and Salt Act, 1944 against the orders of the Customs, Excise and Gold (Control) Appellate Tribunal regarding rebate claims on exported iron and steel products. The dispute arose from the contention that the appellants were entitled to a full rebate on excise duty paid on both raw materials (billets) and finished products (flats) exported.

2. The appellants argued that the rebate of duty paid on the exported goods was admissible under Notification No. 197/62, dated 17-11-1962. They claimed that since duty was paid on the billets used in manufacturing the exported flats, the effective duty rate on the exported goods should be considered higher than the duty paid solely on the flats. The appellants presented invoices showing excise duty payment on billets, which the Collector rejected.

3. Rule 12 of the Central Excise Rules, 1944 allows for rebate of duty paid on excisable goods exported outside India, subject to specified conditions. The Notification No. 197/62 outlines the procedure for granting rebate, emphasizing the duty paid on the exported goods. The Tribunal held that rebate is applicable only to the duty paid on the finished products at the time of clearance for export, not on raw materials.

4. The Court observed that billets and flats are distinct excisable products with different duty rates. The duty rebate is linked to the actual duty paid on the finished products at the time of clearance for export. The Notification No. 153/77 provided for a reduction in duty on flats made from semi-finished steel, establishing that flats are a separate excisable product with a specific duty rate.

5. The appellants argued for a broader interpretation of "duty paid on excisable goods" to include duty paid on raw materials. However, the Court differentiated this case from precedent concerning "short levy" and emphasized that rebate under Rule 12 requires actual duty payment on the exported goods, not on raw materials.

6. Rule 12A deals with rebate on excisable materials used in manufacturing exported goods. The absence of any notification under Rule 12A for claiming rebate on raw materials meant that the appellants could not seek relief under Rule 12. This reinforced the Court's stance that rebate is tied to duty paid on the finished products for export.

7. Ultimately, the Court upheld the Tribunal's orders, dismissing the appeals with no costs, as there were no grounds to interfere with the interpretation and application of the rebate provisions under the Central Excise Rules.