Refund of countervailing duty on export inputs falls within Section 11B where imported raw materials are used in exported goods.

Refund of countervailing duty paid on imported inputs used in the manufacture of exported goods was treated as admissible under Section 11B of the Central Excise Act, 1944. The HC noted that the proviso and explanation to Section 11B cover rebate on exported goods and on excisable materials used in their manufacture, and held that countervailing duty on imported raw material was equivalent to excise duty on like goods manufactured in India. Because the inputs were used in goods exported out of India and the assessee was entitled to CENVAT credit, the claim fell within the statutory refund scheme under Section 11B(2). The appeal failed.

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Issues: Whether the refund claim for countervailing duty paid on imported inputs used in the manufacture of exported goods was admissible under Section 11B of the Central Excise Act, 1944.

Analysis: Section 11B permits refund of duty of excise, and its proviso and explanation treat rebate on exported goods and on excisable materials used in the manufacture of exported goods as refundable. The Court noted that countervailing duty paid on imported raw material was equivalent to the excise duty leviable on like goods manufactured in India, and the raw material was used in the manufacture of goods exported out of India. The Court further held that the assessee was entitled to CENVAT credit on the duty paid and that the refund claim fell within the statutory scheme of Section 11B(2).

Conclusion: The refund claim was admissible under Section 11B of the Central Excise Act, 1944 and the appeal failed.

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