Issue related with rebate under rule - 18 of central excise rules

[Mehul Pandya]

Sir,

We have procured packing material under bond for export purpose. where as our other raw material are excisable purchase. Therefore we have availed Cenvat credit for the same and cleared the same under rebate. Now department says that benefit of two exemptions i.e. procurement of raw material under bond and export the same under rebate not be done simultaniously and not sanctioning our rebate claim accordingly. In this case is there is any way to get refund / rebate of the duty which is used in the material for the export purpose.

[CSSANJAY MALHOTRA]

Department contention is incorrect, exporters are being sanctioned rebate claim on finished Goods under Rule 18 of central Excise Rules, 2002, even if they have purchased imported inputs under advance license without payment of duty.

Further refund can be claimed from the department following the provisions of Rule 5 of CENVAT Credit Rules 2004on accumulated CENVAT Credit due to exports.

However, Benefit of Duty Drawback is not admissible or benefit get reduced if inputs are purchased under bond.

AI Summary

Rebate Claim Under Rule 18: Exporters Can Claim Rebates on Finished Goods Despite Duty-Free Input Procurement. Dual Benefits Allowed. An issue was raised regarding the rebate under Rule 18 of the Central Excise Rules. The party procured packing material under bond for export and used Cenvat credit on excisable raw materials, claiming a rebate. The department objected, stating that dual benefits-procurement under bond and rebate on exports-cannot be availed simultaneously, thus denying the rebate claim. A response clarified that the department's stance is incorrect, as exporters can claim rebates on finished goods under Rule 18, even when inputs are imported duty-free. Additionally, refunds can be claimed under Rule 5 of the CENVAT Credit Rules 2004, though Duty Drawback benefits may be reduced.