2016 (7) TMI 718 - CGOVT - Central Excise

Rebate/ Refund claim - merchant exporters - The duty was paid @ 10% under Notification No. 2/08-CE dated 01.03.2008, as amended. However, the rebate sanctioning authority, has held that the effective rate of duty on the export goods was 4% vide Notification No. 4/2006-CE dated 01.03.2006 as amended. Hence the claimant was eligible for rebate of duty @ 4% adv. paid on export goods. However the rebate claim was rejected on the grounds that in ARE-I No. 04/10-11 dated 29.052010 the chapter heading mentioned on the Central Excise Invoice, ARE-I and shipping bill was different. Held that - Government finds that there is no merit in the contentions of applicants that they are eligible to claim rebate of duty paid @10% i.e. General Tariff Rate of Duty ignoring the effective rate of duty @ 4% or 5% in terms of exemption Notification No. 4/06-CE dated 01.03.06 as amended. As such Government is of considered view that rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% or 5% in terms of Notification No. 4/06-CE dated 1.03.06 as amended, as applicable on the relevant date on the transaction value of exported goods determined under section 4 of Central Excise Act, 1944. As regards the discrepancies in Chapter heading in ARE-I, Excise invoice viz-a-viz Shipping Bills, the applicant themselves admitted to have committed the mistake. They have further stated to have applied for amendment before custom authorities. However, even after more than 4 years of such application, the applicant could not submit any order of appropriate authority allowing the amendment. As such, the applicant s contentions on this ground cannot be accepted. Thus the lower authorities have rightly held that the discrepancy in description of the product exported on the shipping bill and corresponding excise invoice would mean that the impugned goods have not been exported by the assessee and hence the applicant is not entitled to rebate. Decided against the applicant.

Issues Involved:

1. Admissibility of rebate claims under Rule 18 of the Central Excise Rules, 2002.
2. Applicability and choice between two simultaneous exemption notifications (Notification No. 2/08-CE and Notification No. 4/06-CE).
3. Discrepancies in chapter headings on the Central Excise Invoice, ARE-I, and shipping bill.
4. Jurisdiction and role of the rebate sanctioning authority.
5. Compliance with CBEC Circulars and Instructions.
6. Legal precedents and their applicability to the case.
7. Procedural fairness and adherence to principles of natural justice.

Detailed Analysis:

1. Admissibility of Rebate Claims:
The applicant, a merchant exporter, filed several rebate claims under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-CE(NT) for duty paid on exported goods. The rebate sanctioning authority limited the rebate to 4% ad valorem, citing Notification No. 4/2006-CE, and rejected the claims due to discrepancies in chapter headings on the documents.

2. Applicability and Choice Between Notifications:
The applicant argued that both Notification No. 2/08-CE (general tariff rate of 10%) and Notification No. 4/06-CE (effective rate of 4%) co-exist without excluding each other, allowing the assessee to choose the beneficial one. The government observed that Notification No. 2/08-CE and its amendments reduced the general tariff rate, while Notification No. 4/06-CE provided an effective rate of duty, and these should be read together as per CBEC instructions. The applicant's claim for a 10% rebate was rejected, as the effective rate of 4% or 5% should apply.

3. Discrepancies in Chapter Headings:
The applicant admitted discrepancies in chapter headings on the Central Excise Invoice, ARE-I, and shipping bill due to a mistake by their Custom House Agent. Despite applying for amendments, no order from the appropriate authority was submitted, leading to the rejection of the rebate claim on grounds that the goods exported were not properly documented.

4. Jurisdiction and Role of Rebate Sanctioning Authority:
The rebate sanctioning authority cannot question the assessment of export consignment and must follow CBEC Circulars, which mandate that the effective rate of duty be applied. The authority's role is to ensure that the rebate claim is in order, as per Notification No. 19/04-CE(NT).

5. Compliance with CBEC Circulars and Instructions:
CBEC instructions specify that export goods should be assessed to duty in the same manner as goods for home consumption, and the applicable effective rate of duty should be as per the exemption notification. The government upheld these instructions, stating that the applicant could not choose different rates for export and home consumption.

6. Legal Precedents:
The applicant cited several case laws, arguing for the option to choose the beneficial notification. However, the government noted that these cases did not pertain to rebate claims under Rule 18 and involved different contexts. The cited judgments did not allow for simultaneous availing of both notifications, and the applicant's actions were seen as an attempt to encash accumulated cenvat credit.

7. Procedural Fairness:
The applicant claimed a violation of natural justice as the rebate claim was rejected without a show cause notice or personal hearing. However, the government found that the lower authorities acted correctly based on the discrepancies and the effective rate of duty. The rejection was upheld due to the applicant's failure to amend the discrepancies and the adherence to CBEC instructions.

Conclusion:
The government rejected the revision application, upholding the lower authorities' decision. The rebate was deemed admissible only to the extent of duty paid at the effective rate of 4% or 5%, and the discrepancies in documentation led to the conclusion that the exported goods were not properly documented, thus denying the rebate claim.

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