2014 (12) TMI 26 - CGOVT - Central Excise

Denial of Rebate claim - Simultaneous benefits of rebate and drawback - Held that - Respondent had claimed customs portion of drawback on the said exported goods. The drawback rate specified in drawback schedule shall not be applicable to the export of a commodity or product if such commodity or product is manufactured or exported by availing the rebate of duty paid on materials used in the manufacture or processing of such commodity or product in terms of Rule 18 of Central Excise Rules, 2002. CBEC vide Circular No. 83/2000-Cus., dated 16th October, 2000 has clarified that where only Customs portion of duties is claimed as per the All Industry Rate of Drawback (erstwhile) Rule 57F(14), does not come in the way of admitting refund of unutilized credit of Central Excise/Countervailing duty paid on inputs used in the products exported. This clarification also indicates that there is no restriction on granting rebate of duty paid on exported goods when the drawback of Customs portion is availed by exporter. customs portion drawback claim is availed and rebate of duty paid on exported goods is claimed. In view of position explained there is no bar is availing such rebate claim when drawback of only customs portion is availed. As such, Government is in agreement with the findings of Commissioner (Appeals) and the contention of the department is not tenable. - Decided against revenue.

Summary

Issues:
Rebate claim admissibility under Central Excise Rules and Customs Act, 1962.

Analysis:
The revision application was filed by the Commissioner of Central Excise against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) regarding a rebate claim filed by M/s. Four Star Industries. The department contended that the exporter cannot simultaneously claim both input credit and drawback claim. The Commissioner (Appeals) ruled in favor of the respondent, prompting the department to file a revision application.

The department argued that the claimant had filed a shipping bill claiming drawback with the Customs Department, which rendered the sanctioned rebate improper. Additionally, as per Customs, Excise & Service Tax Rules, drawback is not admissible if Cenvat credit is availed. The department claimed that the respondent had simultaneously claimed two benefits, which are not permissible under the rules.

The government carefully reviewed the case records and observed that the original adjudicating authority had initially sanctioned the rebate claim. The department's appeal was based on the contention that both drawback of duty under the Customs Act, 1962, and rebate of duty under Central Excise Rules cannot be claimed simultaneously. However, the Commissioner (Appeals) upheld the Order-in-Original.

The government noted that the respondent had exported goods and claimed the customs portion of drawback. The department argued that since the respondent availed drawback of duty, the rebate claim should not be admissible. However, circulars clarified that there is no restriction on granting rebate of duty paid on exported goods when drawback of the customs portion is availed. The government agreed with the findings of the Commissioner (Appeals) and rejected the department's contention, upholding the impugned order.

In conclusion, the government found no infirmity in the Commissioner (Appeals) order and rejected the revision application for lacking merit.