1991 (2) TMI 147 - CGOVT - Central Excise

Summary

Issues:
1. Eligibility for rebate of Central Excise duty under Rule 12 of Central Excise Rules, 1944.
2. Interpretation of Notification 432/86 and its relation to duty paid on exported goods.
3. Application of Rule 56A regarding remission or adjustment of duty.
4. Comparison between set-off procedure and proforma credit procedure.
5. Relevance of case law in determining duty payment on final products.

Detailed Analysis:
1. The Revision Application was filed by M/s. Zenith Chemicals challenging the rejection of their claim for rebate of Central Excise duty under Rule 12. The Collector (Appeals) upheld the rejection citing that duty rebate was only available for duty paid on goods exported out of India, not on raw materials used in production. The applicant argued for eligibility based on duty payment for exported goods.

2. The applicant contended that Notification 432/86 should be read with Rule 56A(2)(ii)(b) for availing proforma credit, emphasizing that duty was paid through set off provisions. They argued that the notification provided for remission or adjustment of duty on the exported product. The distinction between Notification 95/83 and 432/86 was highlighted, stating that procedural aspects were implicit in Rule 56A.

3. The Government analyzed whether exemption on final products beyond input duty equated to duty payment on final products for export rebate under Rule 12. It was clarified that Notification 432/86 did not mandate Government sanction for duty adjustment as required by Rule 56A(2)(ii)(b). The set off procedure differed from proforma credit, as evidenced by separate registers maintained.

4. The judgment emphasized the difference between exemptions on final products based on input duties and entitlement to duty credits on finished goods under schemes like MODVAT. The set-off procedure for exemptions did not align with proforma credit or MODVAT schemes, requiring a clear distinction between them.

5. The relevance of the case law of M/s. Amar Dye-Chem Limited was discussed, clarifying that the judgment did not equate exemptions under Rule 8 to duty remission or adjustment. The case law dealt with credit disallowance based on Tariff item discrepancies, not exemptions leading to duty payment on final products.

6. The Government concluded that no duty was paid on the exported goods under Notification 432/86, rendering the applicants ineligible for rebate under Rule 12. The Revision Application was rejected, upholding the Collector (Appeals) decision.