Duty-paid export rebate cannot be denied merely because inputs were procured duty free under an export-input scheme.

Rebate on duty-paid exports of excisable final products was held admissible even though the inputs had been procured duty free under the export-input procedure. The applicable notifications did not require such goods to be exported only under bond, and no exclusion barred rebate merely because the inputs were obtained without duty. The two export schemes were treated as complementary, so the rebate authority could not refuse relief on that ground. Rebate was therefore allowed and the objection that export had to be made only under bond was rejected.

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Issues: Whether rebate on export of excisable goods is admissible when the inputs were procured duty free under the export-input procedure, and whether goods manufactured from such inputs can be exported on payment of duty and claim rebate under the rebate procedure.

Analysis: The final products were admittedly dutiable and were exported on payment of appropriate central excise duty. The input-procurement facility under the relevant export-input procedure did not contain any condition that goods manufactured from duty-free inputs must necessarily be exported only without payment of duty under bond. The rebate notification applicable to duty-paid exports also did not exclude such goods merely because the inputs had been obtained duty free. The two procedures were treated as complementary, and the rebate sanctioning authority was not required to deny rebate on that ground.

Conclusion: Rebate was admissible and the objection that the exports had to be made only under bond was rejected.

Final Conclusion: The revision applications failed and the appellate order allowing rebate on the duty-paid exports was sustained.

Ratio Decidendi: Where the exported final product is cleared on payment of duty and the relevant notifications do not impose a prohibition, rebate cannot be denied merely because the inputs were obtained duty free under an export-input procedure.

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