2020 (3) TMI 373 - CGOVT - Central Excise

Rebate claim - Cenvat credit reversed on depreciated value of imported capital goods (machinery parts) at the time of their export - whether the rebate of duty can be granted in case of reversal of Cenvat credit of CVD paid on imported capital goods at time of their export subsequently? HELD THAT - Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 allows rebate claim only in those cases where the goods are manufactured in India and are liable to Central Excise duty and the same has been paid at the time of export. Since the imported goods are not liable for Central Excise duty under the Central Excise Act, 1944 no rebate claim can be filed in respect of such goods which are not excisable under Central Excise Act, 1944. In the present case the applicant could have availed duty drawback under Section 74 of the Customs Act, 1962 read with Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995. Section 74 states that any goods which were earlier imported and then re-exported (whether used or unused), the importer can claim the duty paid at the time of import as Drawback on the fulfilment of certain condition as specified under Section 74 of Customs Act 1962. Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 have been formulated in exercise of the powers conferred by Section 74 of the Customs Act, 1962. The revision application cannot be considered in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - the Government does not find any deficiency in the Commissioner (Appeals)'s order and the revision application filed by the applicant is rejected.

Summary

Issues:
- Rebate claim on Cenvat credit reversed on imported capital goods at the time of export.
- Applicability of Rule 18 of Central Excise Rules, 2002 on imported goods.
- Comparison with duty drawback under Section 74 of the Customs Act, 1962.

Analysis:
1. Rebate Claim on Cenvat Credit:
The case involved a rebate claim filed by the applicant for reversing Cenvat credit on imported capital goods at the time of export. The applicant had paid CVD at the time of import and claimed Cenvat credit of the full CVD amount. The main issue was whether the rebate of duty could be granted in such a scenario where Cenvat credit of CVD paid on imported capital goods was reversed at the time of export.

2. Applicability of Rule 18 of Central Excise Rules, 2002:
The applicant relied on various legal provisions and case laws to support their claim for rebate under Rule 18 of Central Excise Rules, 2002. However, the respondents argued that Rule 18 applies only to excisable goods cleared on payment of duty and not to goods of foreign origin. They contended that since the goods in question were of foreign origin, Rule 18 would not be applicable to grant rebate on such capital goods not manufactured in India.

3. Comparison with Duty Drawback under Section 74 of Customs Act, 1962:
The Government highlighted that the applicant could have availed duty drawback under Section 74 of the Customs Act, 1962, along with the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995. Section 74 allows importers to claim duty paid at the time of import as Drawback upon re-export of goods. It was noted that the applicant did not opt for this option, which was available to them, indicating a potential alternative route for claiming benefits on re-exported goods.

4. Final Decision:
After examining the arguments, case laws, and provisions, the Government concluded that the applicant's revision application could not be considered under Rule 18 of Central Excise Rules, 2002, along with the relevant notification. Therefore, the Government found no deficiency in the Commissioner (Appeals)'s order and rejected the applicant's revision application. The judgment emphasized the importance of understanding the specific legal provisions applicable to the scenario and exploring alternative options available under different statutes for claiming benefits on re-exported goods.