2005 (5) TMI 89 - CGOVT - Central Excise

Summary

Issues:
Rebate claims under rule 18 of the Central Excise Rules, 2002 for duty paid on materials used in manufacturing finished goods cleared for export. Discrepancy in rebate claimed due to recoverable wastage. Denial of rebate on recoverable wastage. Interpretation of Notification No. 41/2001 regarding rebate restrictions. Appeal against denial of rebate on recoverable wastage. Application of Circular No. 129/40/95-CX for rebate computation.

Analysis:
The case involved 12 Revision Applications filed against orders by the Commissioner of Central Excise (Appeals) concerning rebate claims under rule 18 of the Central Excise Rules, 2002. The applicants, M/s. Metweld Inds., filed rebate claims for duty paid on materials used in manufacturing finished goods cleared for export. The original authority noted an excess claim of rebate due to recoverable wastage included in the claim. Show Cause Notices were issued, and after hearing the applicants, the adjudicating authority emphasized that the rebate should be restricted to goods actually used in manufacturing, excluding recoverable wastage.

The adjudicating authority highlighted that Notification No. 41/2001 requires a declaration describing the finished goods to be manufactured and restricts rebate to goods used in the finished products. It was clarified that rebate cannot be claimed on recoverable wastages not exported. The authority disallowed rebate related to recoverable wastage and allowed rebate on materials actually used in manufacturing export goods.

The applicants appealed to the Commissioner of Central Excise (Appeals), who upheld the denial of rebate on wastage not exported. The Commissioner affirmed the lower authority's decision, stating that the denial of rebate on such wastage was correct. In the Revision Application, the applicants raised the issue of rebate computation as per Circular No. 129/40/95-CX, which the authorities had not considered.

Upon review, the Government observed that Circular No. 129/40/95-CX was relevant for rebate computation involving recoverable wastage. The cases were remanded to the original authority for reconsideration based on this observation to pass a fresh order after hearing the applicants. The Revision Applications were disposed of accordingly.