Rebate on exported goods cannot be denied when excise duty is paid within the prescribed monthly payment mechanism.

Rebate of duty on exported goods cannot be denied merely because the excise duty was paid under the monthly payment mechanism in Rule 8 of the Central Excise Rules, 2002. Where the exporter records the removals in the daily stock account and discharges duty within the prescribed time and manner, the requirement of duty payment for rebate under Rule 18 is satisfied. The fact that the goods were exported before the monthly due date is only a procedural point and does not create a substantive bar. A precedent involving delayed payment with interest was distinguishable on its facts.

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Issues: Whether rebate of duty on exported goods could be denied merely because excise duty was discharged under the monthly payment mechanism under Rule 8 of the Central Excise Rules, 2002.

Analysis: Rule 8 of the Central Excise Rules, 2002 permits payment of duty by the prescribed due date in the following month, and Para 8.3 of Chapter 8 Part-I of the Central Excise Manual of Supplementary Instructions treats the condition of payment of duty as satisfied when the exporter records the removals in the daily stock account and discharges duty in the prescribed manner. The essential requirement for rebate under Rule 18 is export of goods on which duty has been paid. The record showed that the export goods were duly exported and duty was paid within time in accordance with Rule 8(1). The authorities also noted that the cited precedent involved delayed payment with interest and was therefore distinguishable. The benefit could not be denied by treating the monthly payment mode as non-compliance with the rebate condition, especially where the matter involved a procedural requirement rather than a substantive bar.

Conclusion: Rebate could not be denied on the ground that the export goods were cleared before the monthly duty payment date, as duty had been paid in accordance with Rule 8 and the rebate conditions stood satisfied.

Ratio Decidendi: Where excise duty on export goods is paid within the time and manner prescribed under Rule 8 of the Central Excise Rules, 2002, rebate under Rule 18 cannot be denied on a merely technical or procedural objection that the goods were exported before the monthly due date of payment.

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