Government denies excise duty rebate for Omkar Textile Mills due to inadmissible claim under Central Excise Rules.

The Government upheld the decision of the Commissioner (Appeals) in the case involving M/s. Omkar Textile Mills. The rebate of excise duty paid on inputs used in the manufacture of exported goods was deemed inadmissible under Rule 18 of the Central Excise Rules, 2002, and Notification No. 93/2004-Cus. The applicant failed to demonstrate the non-availment of deemed export benefits by their supplier, M/s. Indian Oil Corporation Ltd. Consequently, the denial of the rebate claims was affirmed, and the revision applications were rejected.

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Issues Involved:
1. Entitlement to rebate of excise duty paid on inputs used in the manufacture of exported goods under Rule 18 of the Central Excise Rules, 2002.
2. Compliance with the conditions of Notification No. 93/2004-Cus., dated 10-9-2004.
3. Applicability of deemed export benefits under the Foreign Trade Policy (FTP).

Detailed Analysis:

1. Entitlement to Rebate of Excise Duty Paid on Inputs:
The applicant, M/s. Omkar Textile Mills, claimed a rebate of excise duty paid on Linear Alkyl Benzene (LAB) used in the manufacture of Linear Alkyl Benzene Sulphonic Acid (LABSA), which was exported. The Assistant Commissioner initially sanctioned the rebate claims. However, the department contested this decision, arguing that the rebate was inadmissible under Rule 18 of the Central Excise Rules, 2002, due to the conditions of the Advance Authorization Scheme.

2. Compliance with Notification No. 93/2004-Cus.:
The core issue was the violation of condition (v) of Notification No. 93/2004-Cus., which prohibits availing the rebate of duty paid on inputs used in the manufacture of exported goods when the goods are exported under the Advance Authorization Scheme. The Commissioner (Appeals) upheld the department's view, denying the rebate claims. The applicant argued that the condition should only restrict benefits at the time of import and not affect the rebate claims. However, the Government noted that allowing the rebate would result in double benefits, which was not the intention of the Notification. Therefore, the input stage rebate was rightly held inadmissible.

3. Applicability of Deemed Export Benefits:
The applicant contended that neither they nor their supplier, M/s. Indian Oil Corporation Ltd. (IOCL), availed deemed export benefits. The Commissioner (Appeals) found no documentary evidence to support this claim. The Government concurred, stating that the applicant failed to prove that IOCL did not avail deemed export benefits. Thus, the applicant was not entitled to the rebate benefit under para 8.5 of the Export-Import Policy, which stipulates that rebate is inadmissible if deemed export benefits are availed.

Conclusion:
The Government upheld the orders of the Commissioner (Appeals), finding no merit in the applicant's arguments. The rebate of duty paid on inputs used in the manufacture of exported goods was inadmissible due to the conditions of Notification No. 93/2004-Cus., and the lack of evidence regarding the non-availment of deemed export benefits by IOCL. The revision applications were rejected, affirming the denial of the rebate claims.

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