Excise rebate on inputs is unavailable when exported goods are cleared under the drawback scheme.

Rebate of excise duty paid on inputs was held inadmissible where the exported finished goods were cleared under the drawback scheme. The claim arose under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 21/2004-C.E. (N.T.), but para 1.5(i) of Part V of Chapter 8 of the CBEC Excise Manual barred input-stage rebate for exports made under drawback. The instruction was applied without distinguishing between customs and excise components of drawback, and the exclusion was enforced on the basis of strict adherence to the governing language. The revision therefore succeeded in favour of Revenue.

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Issues: Whether rebate of excise duty paid on inputs is admissible when the exported finished goods are cleared under a duty drawback claim.

Analysis: The rebate claim arose under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 21/2004-C.E. (N.T.) dated 06.09.2004. The exported goods were cleared under the drawback scheme, and the governing instruction in para 1.5(i) of Part V of Chapter 8 of the CBEC Excise Manual barred input-stage rebate where finished goods were exported under claim of drawback. The relevant instruction did not distinguish between customs and excise components of drawback. Applying the principle that clear statutory language must be strictly followed, the exclusion operated against the rebate claim.

Conclusion: The rebate of excise duty paid on inputs was not admissible when the export was made under the drawback scheme, and the revision succeeded in favour of Revenue.

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