2012 (11) TMI 37 - CGOVT - Customs

Rebate claim cenvat credit with DFIA Scheme - Held that - The effect of retrospective legislation is that Notification No. 40/2006-Cus., dated 1-5-2006 never prohibited rebate on export of goods under DFIA Scheme, if the Cenvat Credit of duty paid on imported/procured raw material have been availed. No restriction in the said Notification No. 40/06-Cus., dated 1-5-2006, on claiming rebate of duty paid on exported goods and availment of Cenvat Credit - applicant has complied with all the provisions and procedure as laid down in Rule 18 of Central Excise Rules, 2002 and Notification No. 19/04-C.E. (N.T.), dated 6-9-2004 and there is no dispute about the export of duty paid goods, the rebate claim is admissible to the respondent rebate claim allowed

Summary

Issues:
1. Rebate claim filed under Rule 18 of the Central Excise Rules, 2002 for duty paid on excisable goods exported under Duty Free Import Authorization (DFIA) Scheme.
2. Eligibility of the applicant for rebate/refund of duty paid on exports.
3. Relationship between Rebate Scheme and DFIA Scheme.
4. Amendments to Notification No. 40/2006-Cus. and their retrospective effect.
5. Compliance with provisions and procedures under Rule 18 of Central Excise Rules, 2002.

Analysis:

1. The revision applications were filed against the Order-in-Appeal by M/s. Essel Foundaries (P) Ltd., regarding rebate claims for duty paid on exported goods under the DFIA Scheme. The applicant complied with all necessary conditions and submitted relevant documents for the rebate claims, which were initially sanctioned by the adjudicating authority.

2. The applicant contended that they never procured duty-free goods under the DFIA Scheme and instead transferred the unused DFIA to the buyer after using duty-paid inputs for manufacturing final products. They claimed that they were fully eligible for the rebate/refund of duty paid on exports under Rule 18 of the Central Excise Rules, 2002, and Section 11B of the Central Excise Act, 1944.

3. The applicant argued that the Rebate Scheme and DFIA Scheme are independent schemes governed by separate rules and notifications. Since there was no restriction under the notification issued under Rule 18 regarding the DFIA Scheme at the relevant time, the Revenue Department could not challenge the validity of the rebate sanctioning orders.

4. The Government observed that the DFIA Scheme prohibited availing Cenvat credit on inputs procured against the Authorization. However, subsequent amendments to Notification No. 40/2006-Cus. removed the restriction on availing such facilities, allowing rebate claims on exported goods even if Cenvat credit on imported/procured materials had been availed.

5. Considering the retrospective amendments and compliance with relevant provisions, the Government found no evidence of the applicant availing double benefits. Therefore, the impugned orders-in-appeal were set aside, and the revision applications were allowed. The revenue safeguards suggested in Circular No. 11/2009-Cus. were recommended to prevent any potential double benefit in the future.