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2016 (6) TMI 994 - GOVERNMENT OF INDIA

2016 (6) TMI 994 - GOVERNMENT OF INDIA - TMI - Rebate / refund claim - export goods - receipt in Indian Rupee through Vostro Account - claim rejected to the extent of remittance not received in foreign currency - The applicant submits that the order of the respondent is erroneous and legally untenable in as much as there is no condition that rebate of duty on exports would be allowed only if the export proceeds are realized in convertible foreign exchange. The applicant submits that Rule 18 or n .....

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nt has given his submission before Commissioner (Appeals). However, there is no findings of Commissioner (Appeals) on this point while drawing the conclusion that applicant did not comply with provision contained in para 2-40 of the FTP. - Matter remanded back. - F.No.195/1575/2012-RA - ORDER NO E 13/2016-CX- Dated:- 25-1-2016 - SMT, RIMJHIM PRASAD, JOINT SECRETARY ORDER : This revision application is filed by M/S. Dynamatic Technologies Ltd against the Order-in-Appeal No. 246/2012-CE dated 31.0 .....

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export made by them on payment of duty under rule 18 of the Central Excise Rules,2002. It was observed that there was deficiency in their rebate claim and accordingly deficiency Memo was issued. The applicants submitted their reply along with required documents on 1403.2011. On verification of the claim, the adjudicating authority denied an amount of ₹ 1,04,442/- to extent of remittance not received in foreign currency and sanctioned an amount of ₹ 1,64,738/- in cash and ₹ 8,67 .....

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notification issued under said rules or Central Excise Act, 1944 that the rebate would be allowed only if the export proceeds are realized in convertible foreign exchange. It is submitted that the Commissioner (Appeals) has erred in rejecting the appeal solely on the basis that the applicants have not produced any evidence of fulfilling the conditions specified in Foreign Trade Policy 2009-14 (FTP) and has erroneously interpreted the provisions of FTP stating that the rupee payment should be th .....

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1999 read with FEMA (Manner of Receipt and Payment) Regulations, 2000 as the amounts are routed through Vostro account of the Foreign Bank. Further, receiving the export proceeds in Indian Rupees is also permitted under Foreign Trade Policy 2009-14 which specifically provide that where Indian Rupees received through Vostro Account of non-resident banks would be taken as export realization under export promotion schemes of FTP. On this ground alone, the order of the respondent may be set aside an .....

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t in terms of Rule 18 which provides powers to issue notification to prescribe conditions procedures and safeguards, the Central Government has issued notification No. 19/2004-C.E(N.T,), dated 06.09.2004. The applicant submits that even under the above said notification there is no condition prescribed that the benefit of rebate on export of goods under Rule 18 would be allowed only if the export proceeds are realized in convertible foreign exchange. 4.3 The applicant submits that even Central E .....

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ate is dependent on realization of export proceeds. On this ground also, the order of the respondent may be set aside and rebate be granted. 4.4 The applicant submits that the order of the respondent is erroneous and legally untenable in as much as there is no condition that rebate of duty on exports would be allowed only if the export proceeds are realized in convertible foreign exchange The applicant submits that the Foreign Trade Policy(FTP) 2009-14 which governs the provisions relating to ex .....

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ant to understand the term 'Vostro Account' which is referred to in the FTP. 4.5 Vostro/Nostro account is nothing but a foreign exchange account of one bank held by another bank. The Applicant submits that they have followed the procedure prescribed under FTP and have realized the export proceeds in Indian Rupees the ultimate realization of which will take place in foreign exchange into the country. The foreign customer of the Applicant has instructed their bank to remit the export proce .....

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are realized in convertible foreign exchange. The Applicant submits that the Foreign Exchange Management ACT, 1999 (FEMA) which governs the provisions relating to external trade and inward and outward payment in foreign exchange, provides that in certain cases exports could be realized in Indian Rupees in certain cases. 4.7 It is submitted that under this mechanism, which is permitted under Foreign exchange laws, the Indian bank would hold foreign exchange bank account with foreign bank (Vostro .....

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FTP. 4.8 The applicant submits that the order of the respondent is erroneous and legally untenable in as much as there is no condition that rebate of duty on exports would be allowed only if the export proceeds are realized in convertible foreign exchange. The applicant submits that Rule 18 or notification issued under the said rule does not prescribe any condition that the rebate is dependent on realization of export proceeds. The applicant submits that even under Duty drawback scheme under Ru .....

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.06.2015 informed that case be decided based on findings in the Order-in-Original/Order-in-Appeal. 6. Government has gone through the relevant case records/available in case files, oral & written submission and perused the impugned Order-in-Original and Order-in-Appeal. 7. Government observes that part rebate claim of the applicant was rejected on the ground of non-realization of the remittance in foreign exchange. Commissioner (Appeals) upheld impugned Order-in-Original. Now, the applicant .....

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e complied with the condition of FTP, Now, in view of rival contention, Government proceeds decide the issue in limit of above said provision of FTP. 8.1 The said provision 2-40 of FTP reads as under:- All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency, However, export proceeds against specific exports may also be realized in rupee, provided it is through a freely conve .....

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