TMI Blog2016 (3) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... porter claimed drawback on the ground that goods were actually exported. The Apex Court placing reliance on the concept of movement of goods outside the territorial waters of India to complete the export, held the claim of drawback as inadmissible - the ratio of the decision is squarely applicable to the present case as both rebate and drawback arise only upon export of goods. Government also notes that Commissioner (Appeals) has rightly observed that the purpose of rebate of duty paid is to allow the goods to be available in the international market at a competitive price so that taxes are not exported along with the goods. Admissibility of rebate therefore, rest upon the goods joining the course of international trade. In this case, whatever be the reasons, the export has not taken place and therefore the grant of rebate of duty paid does not arise under the stipulation of Rule 18 read with N/N. 19/2004-C.E. (N.T.), dated 6-9-2004. Transfer of ownership of goods is not one of the requirements for eligibility of rebate. The entitlement of rebate benefit will arise not from change of ownership of goods per se but only when they have been exported. Rebate is allowed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the rebate claim, the department merely brushed aside the said submission of the applicants. That the department also erred in stating that for payment of rebate under Rule 18, export is a pre-condition to be fulfilled. That the goods have been exported under FOB contract which stipulates that the responsibility of the exporter is to handover the goods Free On Board (FOB) under the International Contract Terms (INCOTERMS). That once the goods are handed over to the ship, the title in goods is transferred to the customer and any loss in transit is sole responsibility of the overseas buyer. That in the instant case the goods were exported under FOB terms and the export proceeds are also realized in foreign exchange, which completes the condition of rebate which basically casts obligation on the exporter to collect the export proceeds in foreign exchange for the goods exported. That once the said condition is complied with, rebate on the said goods cannot be denied and therefore the order of department is liable to be quashed and set aside. 4.2 The department erred in rejecting the claim only on the ground that the goods have actually not exported. That the department failed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same to a place outside India. That the definition does not envisage that goods must reach in the hands of overseas buyer. That because of accident, goods did not reach the destination. That because of accident the goods did not reach the destination. That despite the accident, the ownership of goods was transferred to the overseas buyer, export was complete and therefore, the overseas buyer claimed the insurance and remitted the proceeds in convertible foreign currency. That the inference of the definition of export as drawn by the Commissioner (Appeals) is wrong and is not capable of handling the situation of accident. 4.6 The Commissioner (Appeals) erred in rejecting the rebate claim without considering the various representation made by the Federation of Indian Export Organisation and the Chairman of C.B.E. C. to issue necessary directions and clarification so that the exporters are not put to financial loss for no mistake of theirs. That the applicants have also directly written to C.B.E. C. requesting to consider their case in view of the recovery of sale proceeds in convertible foreign exchange. 4.7 The department erred in not considering that the Customs offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement on shipping bill by Customs and that copy of mate s receipt not submitted. Accordingly Deficiency Memo-Cum-Show Cause Notice (DM) was issued. The Deputy Commissioner vide impugned Order-in-Original rejected the rebate claims as the goods had not been exported . The applicant filed appeal before the Commissioner (Appeals) who rejected the same. Now the applicant has filed this revision application under Section 35EE of Central Excise Act, 1944 before Central Government on the grounds stated at Para 4. 8. Government observes that the issue to be decided is whether the impugned goods can be said to have been exported for the applicant to be entitled for rebate in terms of Rule 18 of Central Excise Rules, 2002. The lower authorities have held the rebate claim as inadmissible inter alia on the ground that as the vessel on which the impugned goods were loaded, collided with another vessel immediately after leaving the port, the goods were not actually exported. The applicant on the other hand has contended that as the export was on FOB terms the ownership of the goods has been transferred and remittance received, the export was complete. In view of the rival contentions, Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India. It is abundantly clear that the goods have to be exported and rebate shall be paid subject to conditions and limitations set by the Central Government upon fulfilment of prescribed procedures. The C.B.E. C. Manual of Departmental Instructions further clarifies that goods have to be actually exported for rebate to be admissible. 10. Government further draws support from, the ruling of the Hon ble Supreme Court in an identical case of Union of India v. Rajinder Dyeing and Printing Mills, 2005 (180) E.L.T. 433 (S.C.), where the goods had been dispatched through ship for export but due to accident, the ship sunk and goods were destroyed. The exporter claimed drawback on the ground that goods were actually exported. The Apex Court placing reliance on the concept of movement of goods outside the territorial waters of India to complete the export, held the claim of drawback as inadmissible. It was observed as under : 3. Drawback is defined by Rule 2(a) of the said Rules. Drawback is available to goods manufactured in India and exported . For the purposes of the Rules, export is defined to mean, taking out of India to a place outside India..... . 4. Learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) has rightly observed that the purpose of rebate of duty paid is to allow the goods to be available in the international market at a competitive price so that taxes are not exported along with the goods. Admissibility of rebate therefore, rest upon the goods joining the course of international trade. In this case, whatever be the reasons, the export has not taken place and therefore the grant of rebate of duty paid does not arise under the stipulation of Rule 18 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. 13. Government also places reliance on the ruling of the Hon ble Supreme Court in the case of Collector of Central Excise, Vadodara v. Dhiren Chemical Industries - 2002 (143) E.L.T. 19 (S.C.), Paper Products Ltd. v. Commissioner of Central Excise - 1999 (112) E.L.T. 765 (S.C.) and ITC Ltd. v. CCE - 2004 (171) E.L.T. 433 (S.C.) in which the Apex Court has held that strict and plain reading of the statute are to be strictly adhered to and all the authorities working under the respective Central Excise/Customs Acts are to ensure strict applicability of all the relevant Notifications/Circulars as issued for the purpose. 14. The applicant has cont ..... 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