2024 (7) TMI 306 - HC - Central Excise

Rejection of rebate claim u/r 18 of the Central Excise Rules, 2002 read with relevant Notifications issued thereunder - rejection on the ground that the petitioner had wrongly availed Cenvat Credit on Stainless Steel Casting and Non-Alloyed Steel under the Cenvat Credit Rules, 2004 and therefore, the petitioner was not entitled to utilize the Cenvat Credit wrongly availed for discharging duty liability on the exported goods to claim rebate under Rule 18 of the Central Excise Rules, 2002 read with relevant Notifications. HELD THAT - The issue relating to Cenvat Credit availed by the petitioner on Stainless Steel Casting and Non-Alloyed Steel stands confirmed in favour of the petitioner in view of the orders passed by the Division Bench of this Court in W.A.(MD) No.339 of 2014 on 30.04.2014 2014 (4) TMI 1093 - MADRAS HIGH COURT and in W.A.(MD) No.1151 of 2014 on 17.11.2022 2022 (11) TMI 860 - MADRAS HIGH COURT . Thus, the rebate of Cenvat Credit utilized on exports made by the petitioner cannot be denied as the Cenvat Credit that was availed by the petitioner is deemed to be validly availed and utilized for discharging excise duty lability on the exports covered by various rebate claims. These Writ Petitions deserve to be allowed. Thus, the impugned orders of the first respondent seeking to deny rebate claims of the petitioner are quashed - the rejection of rebate claims cannot be sustained.

Summary

Issues:
Challenge to impugned orders under Section 35EE of Central Excise Act, 1944 regarding rebate claims; Rejection of rebate claims due to wrongly availed Cenvat Credit on specific items; Disputed amounts and details of exports; Department's investigation and collection of funds; Previous legal actions and judgments affecting rebate claims; Final appeal to the Supreme Court and confirmation of Cenvat Credit availed by the petitioner; Quashing of impugned orders denying rebate claims.

Analysis:

The petitioner challenged impugned orders by the Revisional Authority under Section 35EE of the Central Excise Act, 1944, regarding rebate claims. The rejection of rebate claims was based on the petitioner's wrongful availing of Cenvat Credit on "Stainless Steel Casting" and "Non-Alloyed Steel," rendering the petitioner ineligible to claim rebate under Rule 18 of the Central Excise Rules, 2002. The exports in question spanned various months in 2010, 2011, and 2012, with specific claim amounts and disputed figures outlined for each instance.

During the consideration of rebate claims, the Department initiated an investigation and collected funds from the petitioner. Legal actions ensued, including a Writ Petition in 2013 and subsequent orders directing investigation completion and issuance of show cause notices. A Writ Appeal in 2014 reversed the initial judgment, leading to the quashing of a Show Cause Notice issued in 2013. Further challenges and appeals culminated in the Supreme Court's dismissal of the Department's appeal due to significant filing delays.

The Division Bench of the High Court confirmed the petitioner's Cenvat Credit availed on specific items, leading to the validation of the credit utilized for duty discharge on exported goods. Consequently, the rejection of rebate claims was deemed unsustainable, resulting in the quashing of the impugned orders. The lower authorities were directed to finalize rebate claims, issue pay orders, and include interest on delayed payments expeditiously, preferably within six months from the judgment's receipt.

In conclusion, the Writ Petitions were allowed, with the impugned orders denying rebate claims being quashed. The Department was instructed to process rebate claims promptly, and the legal proceedings were brought to a close with no costs incurred.