Rebate of duty on export denied where imported capital goods were not duty paid excisable goods and only Cenvat credit was reversed.

Rebate of duty on export was available only for duty-paid excisable goods, or where duty had been paid on materials used in manufacture. Imported generator and knitting machines exported after reversal of Cenvat credit did not satisfy that condition because they were not goods manufactured in India and no Central Excise duty had been paid on the exported goods. The reversal under Rule 3(5) and Rule 3(5A) of the Cenvat Credit Rules was only a credit reversal on CVD, not payment of export duty. Rebate was therefore not admissible, and rejection of the revision applications was justified.

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Issues: Whether rebate of duty was admissible on export of imported generator and knitting machines on reversal of Cenvat credit, when no excise duty had been paid on the exported goods.

Analysis: Rebate under Rule 18 and Notification No. 19/2004-C.E. (N.T.) is available only where the exported goods are duty paid excisable goods, or where duty has been paid on materials used in manufacture. The goods exported in this case were earlier imported capital goods, not goods manufactured in India, and therefore were not excisable goods. The amount reversed under Rule 3(5) and Rule 3(5A) of the Cenvat Credit Rules, 2004 was only a reversal of credit previously taken on CVD and was not payment of Central Excise duty on export. Since no excise duty had been paid on the exported goods, the condition for rebate was not satisfied.

Conclusion: Rebate was not admissible and the rejection of the revision applications was justified.

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