2012 (10) TMI 949 - AT - Central Excise

Waiver of pre deposit - Assessee exported their finished products under rebate claim under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, after clearance on payment of duty - Held that - Rebate of duty under Rule 18 of Central Excise Rules, 2002 provides for rebate of duty in respect of export of goods in terms of the conditions and limitations as prescribed under Notifications issued under this rule. Central Government has issued Notification No. 19/2004-C.E. (N.T.) which prescribes conditions subject to which rebate is to be granted in terms of Rule 18 of Central Excise Rules, 2002 and there is no dispute that the exports under rebate claim had been made in terms of the procedure prescribed in this notification. On going through this notification, we find that there is no absolutely no condition providing that grant of rebate is subject to realization of the export proceeds. The allegation is that export proceeds are less than the exports value declared by the appellant for which explanation given by the Appellant is that this is due to exchange rate fluctuation, which prima facie appears to be correct. In view of this there is prima facie a case in favour of the appellant. Therefore, the requirement of per-deposit of duty demand, interest and penalty is waived for hearing of the appeal and recovery thereof is stayed till disposal of the appeal - Stay granted.

Summary

Issues:
Claim for rebate under Rule 18 of Central Excise Rules, 2002 based on non-realization of full export proceeds.

Analysis:
The case involved a manufacturer of M.S. ingots, blooms, plates, hot-rolled and cold rolled coils/strips of stainless steel exporting finished products under rebate claim under Rule 18 of the Central Excise Rules, 2002. The Department objected to the rebate claim, citing non-realization of the full amount of export proceeds. A show cause notice was issued for recovery of rebate along with penalties. The Commissioner upheld the objection, confirming a duty demand, interest, and imposing a penalty. The appellant appealed this decision, arguing that the conditions for rebate under Rule 18 were not contingent on full realization of export proceeds, as per Notification No. 19/2004-C.E. (N.T.). The appellant contended that the slight discrepancy in export proceeds was due to exchange rate fluctuation, making the denial of rebate unjustified. The appellant sought a waiver of pre-deposit for the appeal.

During the hearing, the appellant's counsel emphasized the absence of any specific condition in the relevant notification requiring full realization of export proceeds for rebate eligibility. The Department's representative defended the denial of rebate based on a circular mandating full realization, but failed to provide a legal basis for this stance. The Tribunal noted that the Department did not dispute the export of goods or the receipt of shipping bill proof but objected only to the shortfall in export proceeds. Upon review, the Tribunal found no explicit condition in the notification linking rebate eligibility to full realization of export proceeds. The Tribunal acknowledged the appellant's explanation of the discrepancy being due to exchange rate fluctuation, indicating a prima facie case in favor of the appellant. Consequently, the Tribunal allowed the stay application, waived the pre-deposit requirement, and stayed the recovery pending appeal disposal.

In conclusion, the Tribunal ruled in favor of the appellant, granting the stay application and waiving the pre-deposit requirement for the appeal. The decision was based on the absence of a specific condition in the notification requiring full realization of export proceeds for rebate eligibility, coupled with the appellant's plausible explanation for the discrepancy in export proceeds.