Excise Rebate, Central Excise

[Sanjay Sharma]

Dear Sir,

 We are exporting the Automobiles parts on payment of Excise duty and subsequently claiming the rebate of excise duty paid at the time of Export and while procuring inputs we are claiming the CENVAT credit of the excise duty paid on Inputs.

 Questions need to be answered—

 In your view, is it appropriate to deposit the Excise duty and then claim the same as rebate? ,

1.  Should we stop the export on payment of duty and subsequent claiming of rebate, because in this scheme we are getting only our hard earned money back which we deposited as excise duty from the excise department after a considerable time, no value addition?
2. Alternatively, and most importantly, should we opt Export without payment of Excise duty under LUT and then claim (i) Refund of CNVAT credit accumulated on account of non-payment of duty on export, (ii) claim Duty Draw Back under All Industry Rate?

 Pls. give us your valuable opinion about above situation and guide us which scheme we should go for.

 Thanks and Regards,

Sanjay Sharma.   

Posts / Replies

[Pradeep Khatri]

Dear Sanjay,

1. If you have accumulated CENVAT credit in your credit account and if you are not able to adjust it against your duty liability on the final product while removing the same within India, then, it is advisable to export the goods on payment of Central Excise Duty and claim the rebate of the same, though some expenses must be associated with such refunds. 
2. You can avail the benefit of Duty Drawback under All Industry rate also but if your customs duty component is much more than what you are getting under All Industry rate then you must opt for Brand Rate Fixation.

Best Regards,

Pradeep Khatri

[rakshit verma]

you can also procure inputs to be used in export product without payment of duty under rule 19. exact reply is possible by examining the balances of cenvat credit. You can also reach me at :  [email protected]

regards

Rakshit

[Sanjay Sharma]

Dear Experts,

Thanks a lot for the prompt replies, but i was forget to mention that there is no domestic sale at all, it is 100 % export and if the case is lile this, then in my view my submission is logical. pls. confirm once agian.

Best regards,

Sanjay Sharma 

[Pradeep Khatri]

If you are 100% exporting your final goods then you may avail the refund of accumulate CENVAT credit under Rule 5 of the Cenvat Credit Rule, 2004 as amended time to time.  Kindly also refer Notification No. 11 dated 1^st March 2002.