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2013 (7) TMI 302 - CGOVT - Central ExciseRebate under Rule 18 of the Central Excise Rules Held that - Notification No. 24/2003-C.E., dated 31-3-2003 was issued under Section 5A(i) of Central Excise Act, 1944, exempts goods manufactured by 100% EOU and cleared for export from whole of duty unconditionally. Therefore in view of provisions of sub-section (1A) of Section 5A(1), the applicant manufacturer cannot pay duty - As such rebate claim is not admissible in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 as supported from the decisions of the Apex Court in M/s. ITC Ltd. v. CCE 2004 (9) TMI 103 - SUPREME COURT OF INDIA and M/s. Paper Products v. CCE 1999 (8) TMI 70 - SUPREME COURT OF INDIA that the simple and plain meaning of the wordings of statute are to be strictly adhered to. Duty paid without the authority of law cannot be treated as duty paid under the provision of Central Excise Act - Such paid amount to be treated as a voluntary deposit made by applicant with the Government Assessee entitled to cash refund only of the portion deposited by it by actual credit and for remaining portion, refund by way of credit is appropriate - Excess paid amount/duty is required to be returned to the respondent in the manner in which it was paid by him initially Ordered to be re-credited in their Cenvat Credit Account - Rebate claims are rightly held inadmissible under Rule 18 of Central Excise Rules, 2002 read with Not. No. 19/2004-C.E. (N.T.), dated 6-9-2004. Decided against the Assessee.
Issues Involved:
1. Eligibility for rebate claims under Rule 18 of the Central Excise Rules, 2002. 2. Applicability of Notification No. 24/2003-C.E., dated 31-3-2003. 3. Interpretation of Section 5A(1A) of the Central Excise Act, 1944. 4. Treatment of duty paid by a 100% EOU on goods exported. 5. Re-credit of excess duty paid in the Cenvat Credit Account. Detailed Analysis: 1. Eligibility for Rebate Claims under Rule 18 of the Central Excise Rules, 2002: The applicant, a 100% Export Oriented Unit (EOU), exported goods on payment of duty and claimed rebate under Rule 18 of the Central Excise Rules, 2002. The adjudicating authority rejected the rebate claims on the grounds that the goods manufactured by a 100% EOU are fully exempt from duty under Notification No. 24/2003-C.E., dated 31-3-2003, and thus, no duty was payable. Consequently, any amount debited as duty in the Cenvat Credit Account does not attain the status of duty. The Commissioner (Appeals) upheld this decision, leading to the present revision application. 2. Applicability of Notification No. 24/2003-C.E., dated 31-3-2003: The applicant argued that the exemption under Notification No. 24/2003-C.E. is not absolute and that they had the option to export goods under Rule 18 or Rule 19 of the Central Excise Rules, 2002. They contended that the notification is conditional, as duty is payable on Domestic Tariff Area (DTA) clearances. However, the government noted that the notification provides absolute exemption for goods cleared for export, and thus, the provisions of Section 5A(1A) of the Central Excise Act, 1944, are applicable, meaning no duty was required to be paid on such exported goods. 3. Interpretation of Section 5A(1A) of the Central Excise Act, 1944: Section 5A(1A) of the Central Excise Act, 1944, states that if an exemption is granted absolutely, the manufacturer cannot pay the duty. The government observed that Notification No. 24/2003-C.E. exempts goods manufactured by a 100% EOU and cleared for export from the whole of duty unconditionally. Therefore, the applicant cannot opt to pay duty and claim a rebate. 4. Treatment of Duty Paid by a 100% EOU on Goods Exported: The applicant cited various case laws to support their claim for rebate, including a decision in their own case by the Hon'ble Tribunal, which held that EOUs could utilize Cenvat credit for payment of duty on exports. However, the government distinguished these cases, noting that they pertained to the eligibility of Cenvat credit on inputs and not the payment of duty on exported goods. The government also referenced a Board Circular clarifying that EOUs cannot pay duty on fully exempted goods and claim a rebate. 5. Re-credit of Excess Duty Paid in the Cenvat Credit Account: The government acknowledged that any duty paid without the authority of law should be treated as a voluntary deposit and must be returned. The Hon'ble High Court of Punjab & Haryana held that excess duty paid on exports should be refunded in the manner it was paid. Consequently, the government directed that the excess duty paid by the applicant be re-credited to their Cenvat Credit Account. Conclusion: The government found no infirmity in the impugned order-in-appeal and held that the rebate claims were rightly rejected under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. The revision application was disposed of accordingly.
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