2021 (10) TMI 1028 - CGOVT - Central Excise

Export rebate claim allowed under CGST Act, 2017: Key ruling on admissibility criteria

The revision application was allowed, granting consequential relief to the Applicant. The dispute centered on the admissibility of a rebate claim under ... Rebate Claim - rejection on the ground that since the goods exported vide the said ARE-I were reimported by the Applicants, it implied that the export was not completed - whether the rebate of Central Excise duty paid in respect of exported goods would be admissible when the goods were exported before advent of CGST regime but rebate claimed after it? - Rule 18 of Central Excise Rules, 2002 - HELD THAT:- As the goods were reimported and a credit note was issued against the proceeds realised, the lower authorities have taken a view that the export was not complete. As per Section 2(18) of the Customs Act, 1962, “ ‘export’ with its grammatical variations and cognate expressions, means taking out of India to a place outside India”. In the present case, the goods were taken out of India and reached buyer’s place who returned them. Thus, it is clear that goods had been taken to and had reached a place outside India. Subsequent reimport of goods would not change this factual position. The findings of Commissioner (Appeals) on this count cannot be sustained. Further, the Applicants have correctly drawn attention to the provisions of Section 142(1) of the CGST Act, 2017 which provide for refund of Central Excise duty paid in accordance with the Central Excise Law if the Central Excise Duty had been paid for any goods at the time of their removal not earlier than six months from the appointed date i.e. 1-7-2017 and if the goods are returned within a period of six months from 1-7-2017 and are identifiable to the satisfaction of proper officer. In the present case, the goods were removed for export on payment of Central Excise duty on 22-6-2017 (i.e. not earlier than six months from 1-7-2017) and were imported back on 23-11-2017 (i.e. within six months from 1-7-2017). There is also no dispute regarding the identity of goods. The Government further observes that upon import, IGST was paid and no refund of IGST, so paid, has been claimed. Therefore, sanction of rebate of Central Excise duty paid will also not lead to any double benefit. In these facts and circumstances, the Government holds that the rebate claim is admissible. Application allowed. Issues:1. Admissibility of rebate claim under Central Excise Rules for goods exported before the advent of CGST regime but claimed after it.2. Completion of export process and implications of reimportation on rebate claim.3. Interpretation of Section 142 of the CGST Act, 2017 in relation to refund of Central Excise duty paid.Analysis:1. The case involved a revision application filed against the Order-in-Appeal upholding the rejection of a rebate claim by the Commissioner (Appeals). The Applicant, engaged in the manufacture of Fluticason Propionate, exported goods under Central Excise Rules, reimported them, and exported again under CGST Rules. The dispute centered on the admissibility of a rebate claim under Central Excise Rules for goods exported pre-CGST regime but claimed post-CGST regime.2. The lower authorities contended that the export was incomplete due to reimportation and issuance of a credit note against export proceeds. However, the Government disagreed, emphasizing that the goods physically left India and reached the buyer's location, fulfilling the definition of export under Customs Act, 1962. The absence of a requirement in Rule 18 for realizing export proceeds as a condition precedent to export completion was highlighted. Additionally, the provisions of Section 142(1) of the CGST Act, 2017 were invoked to support the admissibility of the rebate claim.3. The Government's analysis focused on the timeline of events, noting that the goods were removed for export post-1-7-2017 and reimported within six months, meeting the conditions for refund under Section 142(1) of the CGST Act, 2017. The absence of an IGST refund claim upon reimportation further supported the allowance of the Central Excise duty rebate claim. Ultimately, the Government allowed the revision application, granting consequential relief to the Applicant.