2008 (9) TMI 176 - HC - Central Excise

Government decision on partial cash rebate upheld; petitioner denied full refund for voluntarily overpaying duty

The High Court upheld the Government's decision to allow a partial cash rebate and credit the remaining amount to the cenvat account, dismissing the ... Mode of refund - Rebate / refund to be made in Cash or to be re-credited into Cenvat Credit account - petitioner paid lesser duty on the domestic product and higher duty on the export product which was admittedly not payable - petitioner asserts that it is entitled to claim the entire refund in cash – revenue’s plea that petitioner is entitled to cash refund only of the portion deposited by it by actual credit and for the remaining portion, refund by way of credit is appropriate, is acceptable - Circular No.687/3/2003 can be of no avail to the petitioner – petition dismissed Issues:1. Entitlement to rebate of excise duty on exported goods.2. Mode of refund - cash or credit to cenvat account.Entitlement to rebate of excise duty on exported goods:The petitioner, engaged in the manufacture and export of cotton yarn and woven fabrics, had paid excise duty at a higher rate of 16% on goods exported, despite being eligible for exemption notifications that allowed for lower duty payment. The Central Government issued notifications providing for a rebate of excise duty paid on exported goods. The petitioner filed a rebate claim, which was partially allowed by the Assistant Commissioner. The petitioner contended that the entire rebate should be in cash, relying on a circular and various judgments. However, the Government revised the decision, maintaining the original order of partial cash rebate. The High Court noted that there was no dispute regarding the petitioner's entitlement to a refund, but the contention was the mode of refund - cash or credit.Mode of refund - cash or credit to cenvat account:The petitioner argued for a cash refund of the entire rebate, citing a circular and judgments supporting its stance. The High Court analyzed the circular and judgments cited by the petitioner. It observed that the circular did not address the distinction between duty paid and duty payable, and the judgments referred to were not directly applicable to the present case. The Court highlighted that the dispute was about the mode of refund, not the entitlement to it. The Court dismissed the petitioner's claim for full cash refund, emphasizing that the petitioner had paid a higher duty on exported goods voluntarily, which was not payable as per the exemption notifications. Therefore, the Court found no fault in the Government's decision to allow a partial cash rebate and credit the remaining amount to the cenvat account.In conclusion, the High Court dismissed the writ petitions, upholding the Government's decision on the mode of refund and finding no infirmity in the impugned order.