Export under rebate-non realization of export proceeds

[arbs sarma]

Sirs,

We exported our final product on payment of duty under claim of rebate. We have also received rebate from department on the FOB value. However, subsequent to export, depending on the market conditions abroad we offered discounts to the foreign customers which resulted in short receipt of export proceeds. As the discounts were offered subsequently, the same was not considered while sanctioning rebate.

Rebate is covered under Rule 18 of CER, 2004 read with Notfn No. 19/2004-CE (NT). In the Rule as well as in the Notfn, no condition has been stipulated that grant of rebate is subject to realization of export proceeds.

In the above scenario:

1 . Are we liable to pay back excess rebate sanctioned ,if any, back to govt due to short receipt of export proceeds.

2. What are the consequences in case of non realization of export proceeds.

3. Will there be any liability in case where goods are exported under LUT, and export proceeds are short realized/ non realized.

4. If we compute and payback the excess rebate sanctioned ,if any, back to department in PLA, are we entitled to get refund of same in cenvat.

regards

 

AI Summary

Debate on Central Excise Rule 18: Must Rebate Be Repaid If Export Proceeds Fall Short? Complex Opinions Arise. An individual raised a query about the implications of offering post-export discounts leading to short receipt of export proceeds after claiming a rebate under Central Excise Rule 18. The discussion involved multiple parties debating whether the rebate must be repaid if export proceeds are not fully realized. One participant argued that the rebate is not contingent on the realization of export proceeds, citing case law and rules that do not stipulate such conditions. Others suggested that non-receipt of foreign exchange could lead to the treatment of exports as domestic sales for duty purposes. Conflicting opinions and case laws were discussed, highlighting the complexity of the issue.