2014 (12) TMI 29 - CGOVT - Central Excise

Rebate claim - Notification No. 4/2009-C.E., dated 24-1-2009 - Rate of duty - effective rate of Central Excise duty was reduced from 10% to 8%. - Held that - On perusal of records, Government observes that in the instant case respondent exporter paid duty @ 10% in respect of excisable goods cleared for export vide ARE-1 No. 86, dated 24-2-2009, whereas the effective rate duty on said goods on the said date was 8% vide Notification No. 4/2009-C.E., dated 24-2-2009. Department has contended that respondent was required to pay duty @ 8% on 24-2-2009 and excess paid duty cannot be rebated under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - notification issued under Rule 18 of Central Excise Rules, 2002, prescribes the conditions, limitations and procedure to be following for claiming as well as sanctioning rebate claims of duty paid on exported goods. The satisfaction of rebate sanctioning authority requires that rebate claim as per the relevant statutory provisions is to be in order. He does not have the mandate to sanction claim of obviously excess paid duty and then initiate proceeding for recovery of the erroneously paid rebate claim. Therefore, the circular of 2000 as relied upon by applicant cannot supersede the provisions of Notification No. 19/2004-C.E.(N.T.). Adjudicating authority has rightly held in his findings that rebate of duty paid @ 8% in terms Not. No. 04/2009-C.E., dated 24-2-2009 is rebatable under Rule 18 but erred in sanctioning the total amount. Government holds that rebate is admissible of duty paid at effective rate of duty on 24-2-2009 i.e. @ 8% in terms of Not. No. 4/2009-C.E., dated 24-2-2009 and part rebate claim of ₹ 60,061/- erroneously sanctioned is recoverable along with applicable interest. Government directs the respondent party to repay in cash the erroneously sanctioned amount of ₹ 60,061/- along with applicable interest to the department and thereafter department may allow the re-credit of said amount in their cenvat credit account in the light of above said judgment of Hon ble High Court of Punjab & Haryana 2008 (9) TMI 176 - PUNJAB AND HARYANA HIGH COURT . Government sets aside the impugned order-in-appeal and modifies the impugned order-in-original to this extent - Decided in favor of revenue.

Summary

Issues involved:
1. Correct application of Central Excise duty rate on exported goods.
2. Interpretation of legal provisions regarding rebate claims.
3. Authority of rebate sanctioning authority to ascertain correctness of duty payment.
4. Treatment of excess duty paid by the exporter.
5. Applicability of case laws on self-assessment and refund claims.

Detailed Analysis:
1. The case involved a dispute over the correct application of Central Excise duty rate on exported goods. The exporter paid duty at 10% instead of the reduced rate of 8% as per Notification No. 4/2009-C.E. The department contended that the excess duty paid could not be rebated under the Central Excise Rules.

2. The interpretation of legal provisions regarding rebate claims was crucial in this case. The Commissioner (Appeals) relied on Circular No. 510/06/2000, stating that the duty paid was certified to be correct by the jurisdictional range office. However, the rebate sanctioning authority must ensure that the claim is in order before sanctioning it, as per Notification No. 19/2004-C.E.(N.T.).

3. The authority of the rebate sanctioning authority to ascertain the correctness of duty payment was discussed. The satisfaction of the rebate sanctioning authority requires that the claim is in order as per statutory provisions. The circular of 2000 could not supersede the provisions of Notification No. 19/2004-C.E.(N.T.), and excess paid duty could not be sanctioned without recovery.

4. The treatment of excess duty paid by the exporter was a significant issue. The excess amount paid voluntarily could not be considered as duty and had to be returned to the exporter. The High Court decision emphasized that excess duty paid on export products, which was not payable, should be refunded in the manner it was initially paid.

5. The applicability of case laws on self-assessment and refund claims was crucial in determining the outcome of the case. The judgment highlighted various legal precedents and interpretations related to self-assessment, assessment by officers, and the process of claiming refunds based on duty payments.

Overall, the judgment directed the respondent to repay the erroneously sanctioned amount along with applicable interest to the department. The excess amount was to be returned to the exporter in the manner it was initially paid, following legal precedents and statutory provisions.