Strict compliance with export rebate conditions required prior approval of input-output ratio for each distinct product.

Rebate of duty on inputs used in exported goods is available only on strict compliance with the notification governing Rule 18, including prior filing of declaration and verification of the applicable input-output ratio before export. The text distinguishes menthol crystals from menthol as separate products with different tariff classification and manufacturing processes, requiring separate declaration and approval. Because export preceded verification and fixation of the ratio for menthol crystals, compliance was treated as a mandatory statutory condition rather than a procedural formality, and the rebate claim was held inadmissible.

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Issues: Whether rebate of duty on inputs used in exported goods was admissible when the respondent had not obtained separate approval of the input-output ratio for menthol crystals before export and had not complied with the procedure under the relevant notification.

Analysis: The rebate scheme under Rule 18 operates subject to the conditions of Notification No. 21/2004-CE (NT) dated 06.09.2004, which requires filing of declaration and verification of the input-output ratio before commencement of export. The record showed that the original declaration and approval related to menthol, while menthol crystals were distinct products with a different tariff classification and manufacturing process, requiring separate declaration and approval. The export of the goods preceded verification and fixation of the ratio for menthol crystals. Compliance with the notification was therefore not a mere formality but a mandatory statutory condition for availing rebate.

Conclusion: The rebate claim was not admissible and the order allowing the appeal was unsustainable.

Final Conclusion: The revision application succeeded, the appellate order was set aside, and the orders-in-original rejecting rebate were restored.

Ratio Decidendi: Benefit under a conditional exemption or rebate notification can be granted only upon strict compliance with its mandatory procedural and substantive requirements, including prior verification and approval of the applicable input-output ratio for each distinct export product.

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