Rebate on exported excisable goods must follow duty actually paid; sanctioning authority cannot reopen assessment or limit relief to FOB value

Rebate on exported excisable goods is to be granted on the duty actually paid on the goods, not confined to the FOB value, where the duty has already been assessed and certified. The rebate sanctioning authority cannot reopen the correctness of the assessment or substitute its own view of the assessable value while processing the claim. Circulars governing rebate claims were treated as controlling, and the direction to re-credit the differential amount was found impractical for a merchant exporter without a Cenvat account. The revisional order was therefore unsustainable.

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Issues: Whether rebate on exported excisable goods was to be granted on the basis of the CIF value or restricted to the FOB value, and whether the rebate sanctioning authority could examine the correctness of assessment while processing the claim.

Analysis: The petitioners exported goods purchased from manufacturers and claimed rebate of the duty paid. The adjudicating authority restricted the cash rebate to the FOB value and directed re-credit of the differential amount, treating the excess as duty paid on an inflated assessable value. The appellate authority reversed that view, relying on the Board circular clarifying that once duty is paid on export goods, rebate is to be allowed to the extent of duty actually paid, and that the rebate sanctioning authority is not to re-open the correctness of assessment. The Court found that the circulars governed the field and that the sanctioning authority had travelled beyond its remit by substituting FOB value for the value on which duty had already been paid. The Court also noted that the petitioner was a merchant exporter and did not maintain a Cenvat account, making the direction for re-credit impractical and meaningless.

Conclusion: The rebate was required to be sanctioned in cash on the duty actually paid and not confined to the FOB value; the impugned revisional order was unsustainable and the petitioner succeeded.

Ratio Decidendi: In rebate claims on exported goods, the sanctioning authority cannot re-determine the assessable value or examine the correctness of assessment once duty has been paid and certified, and rebate must be allowed to the extent of the duty actually paid on the export goods.

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