2017 (7) TMI 513 - HC - Customs

Court denies duty rebate to tractor manufacturer who availed customs benefits; upholds Authority's decision.

International Tractors Ltd. Versus Commissioner of Central Excise & Service Tax

The court held that the petitioner, a tractor manufacturer, was not entitled to a rebate of duty under Rule 18 of the Central Excise Rules, 2002, after ... Rebate - Whether the petitioner is entitled to rebate of duty under Rule 18 of the Central Excise Rules, 2002 (“CER'), having availed of the benefit of Notification No.93/2004-Cus dated 10th September, 2004 issued u/s 25 (1) of the CA, 1962? Held that: - It is the admitted position that the petitioner has availed the benefits under the Advance Authorizations by importing input material and exporting the manufactured goods. The petitioner has, thus, availed of the benefit of non-payment of customs duty on the whole of the imports which it made during the relevant period. The discharge of the Advance Authorizations given in favour of the petitioner was as per N/N.93 of 2004 - In the present case, there is a categorical reference to Rule 18 in Notification No.93. It is a conscious and deliberate inclusion, inasmuch as, the policies envisaged in Rule 18 of the CER and Notification No. 93 is grant of rebate on payment of excise and exemption from payment of customs duty respectively. A party cannot be allowed to avail of both the exemptions when clearly, the intention seems to be to permit only one exemption. Once an export transaction has been used for seeking discharge of Advance Authorizations issued under the CA, the same export transaction cannot be used for seeking rebate of duty under CER, as the rebate, in this case, is subject to the conditions and limitations, as specified in Notification No.93, which clearly requires that ‘the facility under Rule 18 or Sub-rule (2) of 19 of CER, 2002’ ought not to have been availed. The Petitioner’s right to seek rebate is clearly limited by this condition and hence it is not entitled to rebate under Rule 18 CER - petition dismissed - decided against petitioner. Issues involved:1. Entitlement to rebate of duty under Rule 18 of the Central Excise Rules, 2002, after availing benefits of Notification No.93/2004-Cus under the Customs Act, 1962.Detailed Analysis:Question involved:The primary issue in this case is whether the petitioner is entitled to a rebate of duty under Rule 18 of the Central Excise Rules, 2002, after benefiting from Notification No.93/2004-Cus under the Customs Act, 1962.Background facts:The petitioner, a tractor manufacturer, exported models during 2006-2008 and claimed rebate of duty under Rule 18 of the CER. Despite approval of input/output norms, the rebate claims were rejected, leading to appeals and subsequent dismissal by the Revisional Authority.Relevant Provisions/Notifications:Rule 18 of the CER allows for rebates on exported goods subject to specified conditions. Notification No.93 exempts materials imported under certain conditions from customs duty, with a clause specifying that the benefit under Rule 18 or similar rules should not have been availed.Submissions of the Parties:The petitioner argued that Rule 18 is independent of other notifications and statutes, while the respondent contended that availing benefits under Notification No.93 precludes claiming rebates under Rule 18 due to compliance obligations.Analysis and Findings:The court found that the petitioner had availed benefits under Advance Authorizations, exempting customs duty on imports. It was held that Rule 18 rebate is subject to conditions, with Notification No.93 explicitly linking it to the non-availment of certain benefits.The court emphasized that the intention was to allow only one exemption, not both, as evidenced by the interplay between Rule 18 and Notification No.93. The petitioner's right to rebate was limited by the condition in the notification, disallowing the claim under Rule 18 CER.Conclusion:The court upheld the RA's order, denying the petitioner's entitlement to the relief sought, leading to the dismissal of the writ petition without costs.