2013 (8) TMI 575 - CGOVT - Central Excise

Applicants win duty refund appeal despite procedural hurdles; court orders re-credit to Cenvat account.

IN RE : WAVES FOODS PVT. LTD.

The applicants' rebate claims for duty paid on exported goods were initially rejected due to procedural non-compliance and discrepancies. However, the ... Conditions of Notification No. 40/2001 and Notification No. 21/2004 – Classification of Goods under proper Heading - Rebate Claims - Assesse had filed applications for rebate claims of duty paid on said goods exported under Rule 18 of the Central Excise Rules, 2002 - Revenue was of the view that the assesse had not followed the conditions and the procedure as specified in the Notification No. 40/2001-C.E. (N.T.) & Notification No. 21/2004-C.E. (N.T.) - They had declared and exported the goods in the relevant Shipping Bills under Chapter Heading Nos. 2008 99 10 (RITC Code) whereas the chapter heading No. 2108.99 of Central Excise Tariff has been indicated in Central Excise Invoice issued by the manufacturer - Held that:- Rebate claim was rightly disallowed by lower authorities - Goods were being exempted no duty was required to be paid - the amount paid by assesse can be treated as payment of duty - Assesse deliberately choose not to export goods under bond - the rebate of duty under the provision of Rule 18 was eligible only if the duty of excise paid on excisable goods exported or the duty paid on the material used in manufacturing/processing of such goods - the amount paid by assesses was a voluntary deposit made by them on their own volition with the department and same was to be returned in the way it was initially paid - the amount paid by the assesses may be allowed to be re-credited in their Cenvat credit account. M/s. Nahar Industrial Enterprises Ltd. v. UOI [2008 (9) TMI 176 - PUNJAB AND HARYANA HIGH COURT] - Rebate/Refund - Mode of Payment - Petitioner paid lesser duty on domestic product and higher duty on export product which was not payable - Assessee not entitled for refund thereof in cash regardless of mode of payment of said higher excise duty - Petitioner was entitled to cash refund only of the portion deposited by it by actual credit and for remaining portion refund by way of credit is appropriate – Order modified Issues:1. Rebate claims rejection based on procedural grounds and discrepancy in chapter headings.2. Eligibility of refund under Rule 18 of the Central Excise Rules, 2002.3. Interpretation of Rule 6(3)(b) of the Cenvat Credit Rules, 2002.4. Delay in filing revision applications and condonation.5. Applicability of judgments on voluntary deposit and refund.Analysis:Issue 1:The applicants filed rebate claims for duty paid on exported goods but faced rejection due to procedural non-compliance and a discrepancy in chapter headings between Shipping Bills and Central Excise Invoices. The Commissioner (Appeals) condoned the lapses and verified actual exports from ARE-1s and Shipping Bills, allowing the appeal.Issue 2:The applicants claimed refund under Rule 18 of the Central Excise Rules, 2002, for duty reversed on exempted products. The lower authorities rejected the claim, stating the payment under Rule 6(3)(b) is not excise duty eligible for rebate. The applicants argued that the reversal was akin to duty payment, making them eligible for rebate.Issue 3:The interpretation of Rule 6(3)(b) of the Cenvat Credit Rules was crucial. The rule mandates a payment equal to 10% of the value of exempted goods if separate accounts are not maintained. Government noted that since the goods were exempted, no duty was payable, and the payment could not be considered as duty, just a voluntary deposit.Issue 4:The Government acknowledged the delay in filing the revision applications but condoned it due to sufficient cause shown by the applicants. The applications were taken up for decision based on merit, and the issues were addressed collectively.Issue 5:Applying the judgment from the Punjab and Haryana High Court, the Government deemed the payment under Rule 6(3)(b) as a voluntary deposit, directing the amount to be re-credited to the applicants' Cenvat credit account. The impugned Orders-in-Appeal were modified accordingly, resolving the matter in favor of the applicants.In conclusion, the judgment addressed the procedural, eligibility, and interpretational aspects of the rebate claims and voluntary deposit, ensuring a fair resolution for the applicants based on legal principles and precedents.