2016 (3) TMI 550 - HC - Central Excise

Claim of refund / rebate simultaneously while claiming benefit of duty drawback - export of yarn - Duty was paid utilizing the credit of duty paid on the capital goods - Entitlement to claim rebates under Notification No. 19/2014-CE (NT), dated 06.09.2004 - Held that - the benefits claimed by the petitioners are covered under two different statutes, one under Customs, Central Excise Duties and Service Tax Drawback Rules 1995 under Section 75 of the Customs Act, 1962 and the other under Rule 18 of the Central Excise Rules, 2002. As per the proviso to Rule 3 of the Central Excise Duties and Service Tax Drawback Rules 1995, the petitioner is not entitled to claim both the rebates. - Decided against the appellant

Summary

Issues:
Claim for rebate of duty paid on exported goods and availing higher rate of duty drawback simultaneously.

Analysis:
The petitioner, a manufacturer of synthetic and blended textile yarn, exported goods without availing the benefit of cenvat credit, paying excise duty on the exported yarn. They sought rebate of duty paid on the finished goods exported. However, their rebate claims were rejected as they had utilized cenvat credit and availed the benefit of a higher rate of drawback, which was not permissible simultaneously as per Customs Notification No.68/2011-Cus (N.T). The rejection was upheld in appeals before the second and first respondents.

The petitioner contended that they were entitled to both rebates under Rule 18 of the Central Excise Rules, 2002, citing an unreported Supreme Court judgment. The Supreme Court held that exporters are entitled to both rebates under Rule 18. However, the respondents argued that the benefits claimed by the petitioner fell under two different statutes: Customs, Central Excise Duties and Service Tax Drawback Rules 1995, and Rule 18 of the Central Excise Rules, 2002. Therefore, the Supreme Court judgment was not applicable to the present case.

The respondents rejected the petitioner's claim based on the proviso to Rule 3 of the Central Excise Duties and Service Tax Drawback Rules 1995, which stated that a drawback could not be allowed if the exporter had already availed other rebates or refunds on the goods. The court found that the benefits claimed by the petitioner were covered under different statutes, and hence, they were not entitled to claim both rebates. Consequently, the court upheld the rejection of the petitioner's claim, finding no error in the orders passed by the respondents. The writ petition was dismissed.