Rebate on education cess for exported goods was allowed where a later notification was treated as clarificatory.

Education cess paid on exported goods was held eligible for rebate under Rule 18 because the cess was treated as part of the duty burden on exports, and the later notification was only clarificatory in stating that "duty" included education cess for rebate purposes. The fact that the cess had been collected provisionally before formal enactment did not justify a distinction from cess collected later. Denial of rebate on the ground that the clarification could not operate retrospectively was therefore unsustainable, and the rebate claim on education cess was allowed.

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Issues: Whether education cess paid on exported goods was eligible for rebate under Rule 18 notwithstanding that the clarificatory notification was issued later.

Analysis: Education cess was treated as a levy on basic central excise duty and was provisionally collected before formal enactment. The later notification merely clarified that the expression "duty" included education cess for the purpose of rebate. As the rebate mechanism under Rule 18 covered duty paid on exported goods, no distinction could be drawn between cess collected provisionally before enactment and cess collected thereafter. The denial of rebate on the ground that the notification could not operate retrospectively was therefore not justified.

Conclusion: The rebate claim on education cess was allowable, and the rejection of that part of the claim was unsustainable.

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