Duty-paid export requirement governs rebate claims; later appropriation does not cure non-payment for rebate eligibility.

Rebate of duty under Rule 18 of the Central Excise Rules, 2002 is available only when exported excisable goods are duty paid at the time of export and the notification conditions are satisfied. The procedure permitting export otherwise than directly from the factory does not waive that basic requirement. Where goods were cleared and exported without payment of duty, later appropriation of the duty liability did not cure the defect or convert the export into a duty-paid export for rebate purposes. The rebate claim was therefore not admissible, and relief granted on the basis of subsequent appropriation could not be sustained.

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Issues: Whether rebate of duty under Rule 18 of the Central Excise Rules, 2002 and the relevant notifications was admissible when the exported goods were cleared without payment of duty and the duty was later appropriated before the rebate claim was decided.

Analysis: Rebate under the rebate scheme is available only when excisable goods are exported after payment of duty and the conditions attached to the notification are satisfied. The relaxation regarding export otherwise than directly from the factory operates only subject to the prescribed procedure and does not dispense with the basic requirement that the goods must be duty paid at the time of export. On the facts, the goods were exported without payment of duty and subsequent appropriation of duty liability did not cure the defect or make the export a duty-paid export for rebate purposes. The claim therefore failed on the fundamental condition for rebate, and the earlier allowance based on later appropriation was not sustainable.

Conclusion: The rebate claim was not admissible and the relief granted to the assessee could not be sustained.

Ratio Decidendi: Rebate under Rule 18 is available only where the exported goods are duty paid at the time of export and later adjustment or appropriation of duty liability does not satisfy that statutory condition.

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