1999 (10) TMI 84 - CGOVT - Customs

Success in Revision Applications: Modvat Credit for Exported Goods Allowed, Denial of Rebate Deemed Improper

The Revision Applications were successful as the Government allowed the availment of Modvat credit on inputs for paying Central Excise duty on exported ... Export - Rebate Issues:Rebate admissibility on exports of picture tubes under the DEEC Scheme - VABAL issued after 1-4-1995.Analysis:The case involved twenty-five Revision Applications filed by M/s. Tosha International Ltd. against common Orders-in-Appeal passed by the Commissioner (Appeals), Ghaziabad. The Asstt. Commissioner had rejected rebate claims totaling Rs. 32,84,359.86 on Central Excise Duty paid on picture tubes for B/W TV exported to Bangladesh. The rejection was based on the exports being against Value Based Advance Licence (VABAL), availing Modvat credit, and the inadmissibility of credit on inputs as per Notification No. 203/92-Cus. The Commissioner (Appeals) upheld the rejection. The main issue was whether rebate under Rule 12(1)(a) was admissible on exports of picture tubes under the DEEC Scheme - VABAL issued after 1-4-1995.The undisputed facts revealed that the exports occurred between June 1996 and June 1997 under VABAL licenses issued to merchant exporters after 1-4-1995. The procedure prescribed under Rule 12(1)(a) of the Central Excise Rules, 1944 had been followed, and the exports were not in dispute. Notification No. 203/92-Cus. granted exemption on import of goods under the VABAL Scheme, subject to no input credit availed, for licenses issued after 1-4-1992. On the other hand, Notification No. 79/95-Cus. issued in 1995 allowed exemption from basic customs duty without the condition of non-availment of input credit. Circular No. 32/95-Cus. explicitly permitted the availment of input duty credit as Modvat credit.The Government held that there was no bar in availing Modvat credit on inputs and using it to pay Central Excise duty for export clearances. The denial of rebate based on Notification No. 203/92-Cus. was deemed improper, as Notification No. 79/95-Cus. was beneficial to the applicants and should have been considered. The Circulars and CBEC's instructions supported the sanctioning of rebate in cases where duties on exported goods were paid through debit in the Modvat Scheme's register. Consequently, the Revision Applications succeeded, granting consequential relief if the claims were in order.