2012 (7) TMI 848 - CGOVT - Central Excise

Government denies rebate claim under DEPB scheme for goods exported under Rule 19, preventing double benefits. Department's revision application allowed.

IN RE : HI SPEED OFFSETS

IN RE : HI SPEED OFFSETS - 2014 (303) E.L.T. 316 (G. O. I.) Issues Involved:1. Eligibility of rebate claim under DEPB scheme.2. Double benefit of DEPB and rebate.3. Applicability of Rule 18 and Rule 19 of Central Excise Rules, 2002.4. Interpretation of statutory provisions and conditions under DEPB scheme.Detailed Analysis:1. Eligibility of rebate claim under DEPB scheme:The central issue revolves around whether the manufacturer, having exported goods under the DEPB scheme, is eligible for a rebate of duty paid on inputs used in the manufacture of those goods. The Department contended that since the exporter claimed DEPB benefits, no right vests in the exporter/manufacturer to claim the rebate of duty paid on inputs, resulting in a double benefit for the same export. The respondent argued that the endorsement of shipment by Customs authorities on ARE-2s indicated that the benefits under DEPB scheme are not excluded by the availment of the rebate claim.2. Double benefit of DEPB and rebate:The Department argued that DEPB benefits include refunds of duties suffered on account of customs and excise duties, and since the respondent did not use any imported inputs, they only suffered excise duties on inputs. Allowing the rebate claim would result in a double benefit, which is against the intention of export-related schemes designed to refund all duties suffered on exported goods but not to extend double benefits. The respondent countered that the DEPB scheme and rebate under Notification No. 21/2004-C.E. (N.T.) do not overlap, and thus, availing both does not lead to dual benefits.3. Applicability of Rule 18 and Rule 19 of Central Excise Rules, 2002:The Government noted that the goods were exported under CT-1 without payment of duty on the final product, and the respondent claimed a rebate of duty paid on inputs. Rule 18 allows for a rebate of duty paid on excisable goods or materials used in their manufacture, while Rule 19 permits export without payment of duty. The Government emphasized that the exporter must choose one scheme and comply with its provisions. The respondent exported goods under Rule 19, which does not allow for a rebate claim under Rule 18. Allowing such a claim would amalgamate two different schemes, which is impermissible.4. Interpretation of statutory provisions and conditions under DEPB scheme:The Government referred to the principles laid down by the Hon'ble Supreme Court, asserting that the ordinary and natural meaning of words in statutes must be adhered to. The statutes and CBEC circulars, which clarify the application of these statutes, are binding on Revenue/departmental officers. The Government concluded that the respondent's export under Rule 19 does not entitle them to a rebate under Rule 18, aligning with the statutory provisions and the intention behind these rules.Conclusion:The Government set aside the impugned Order-in-Appeal, finding that the respondent, having exported goods under Rule 19, is not entitled to claim a rebate under Rule 18. The revision application filed by the Department was allowed, preventing the respondent from availing double benefits under the DEPB scheme and rebate provisions.