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

Rebate of excise duty may be limited by realization of export proceeds, creating potential recovery liability despite proof of export.
Sanction of rebate under Rule 18 and Notification No.19/2004-C.E. (N.T.) is contested: one view limits entitlement to proof of export (shipping bill, mate receipt, ARE-1) without linking it to realization of export proceeds; another view and some authorities treat short or non-realization as a ground for recovery or conversion to home consumption, leading to duty plus interest, especially where exports are under LUT/bond; BRCs are required in specific circumstances and repayment into PLA does not automatically permit cenvat credit.