2012 (12) TMI 973 - CGOVT - Central Excise

Denial of rebate claim - Availment of CENVAT Credit - manufacturer exporter accepted the same as mistake and reversed the said availed credit - Held that - Applicant Exporter as manufacturer was regularly submitting his Central Excise Returns and never suppressed anything his pleas of above mistake as having been committed inadvertently needs to be considered and his subsequent reversal of that part of inadmissible Cenvat credit should be taken as compliance of applicable provisions of Notification No. 21/2004-C.E. (N.T.) dated 6-9-2004 read with Rule 18 of Central Excise Rules 2004. Government therefore following the principle as adopted in M/s. Cot Fab Exports 2005 (11) TMI 100 - GOVERNMENT OF INDIA is of the considered opinion that such a substantial benefit of rebate claim should not be denied once the Cenvat credit stands reversed. - Decided in favour of assessee.

Summary

Issues:
1. Rebate claim of duty paid on excisable goods used in the manufacture of exported goods.
2. Availment of Cenvat credit on raw materials used in exported goods.
3. Compliance with Notification No. 21/2004-C.E. (N.T.) and Rule 18 of Central Excise Rules, 2002.
4. Reversal of availed Cenvat credit as a corrective measure.

Analysis:
1. The applicant filed a rebate claim for duty paid on excisable goods used in manufacturing exported goods. The Assistant Commissioner granted a rebate, but the department appealed, alleging that the applicant had availed Cenvat credit on raw materials used in exports, violating Notification No. 21/2004-C.E. (N.T.). The Commissioner allowed the department's appeal, setting aside the original order.

2. The applicant, aggrieved by the appeal decision, filed a revision application, arguing that the Cenvat credit availed was a mistake due to being a first-time exporter. They reversed the availed credit upon realizing the error. Citing legal precedents, the applicant contended that the reversal of credit should entitle them to the rebate claim.

3. The Government reviewed the case records and noted the applicant's corrective actions. Despite the department's reliance on previous court decisions, the Government differentiated the case, emphasizing the applicant's inadvertent mistake and subsequent reversal of the availed credit. The Government highlighted the applicant's compliance with Central Excise Rules and Notification No. 21/2004-C.E. (N.T.).

4. Considering the applicant's regular compliance with Central Excise regulations and the corrective measure taken, the Government found merit in the applicant's argument. Referring to previous judgments and principles, the Government concluded that the substantial benefit of the rebate claim should not be denied, especially after the reversal of the Cenvat credit. Consequently, the Government set aside the appeal decision and restored the original order in favor of the applicant.

Conclusion:
The Government's decision in the revision application favored the applicant, recognizing their corrective actions regarding the availed Cenvat credit. The case underscores the importance of compliance with excise regulations and the significance of rectifying inadvertent errors to secure entitled benefits.