Rebate on exported goods fails where input credit rests on fake suppliers and fraudulent invoices.

Rebate on exported goods was held inadmissible where the underlying inputs were traced to fictitious or non-existent suppliers and the credit was supported by fraudulent invoices. The claim depended on the inputs being duty paid and on the manufacturer taking reasonable steps to verify the identity and address of suppliers; those conditions were not satisfied on the facts found by the authorities. Mere export of finished goods did not establish rebate entitlement when the input credit chain rested on paper transactions. The factual findings were not shown to be perverse, and the authority's refusal to interfere with the rebate claim was therefore sustained.

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Issues: Whether rebate could be claimed on exported goods when the inputs were found to have been procured through fake, bogus or non-existent suppliers and the credit was availed on the strength of fraudulent invoices.

Analysis: The claim for rebate depended on the inputs being duty paid and the manufacturer having taken reasonable steps to satisfy itself about the identity and address of the suppliers. The material on record showed that the authorities had found the suppliers to be fictitious or non-existent, that the invoices were not genuine, and that the credit chain was founded on paper transactions. Mere export of finished goods did not by itself establish entitlement to rebate when the underlying inputs were not proved to be duty paid. The factual findings of the authorities were not shown to be perverse, and the case relied upon by the petitioner was distinguishable on its facts.

Conclusion: The rebate claim was not admissible and no interference was warranted.

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