Excise Rebate

[Sanjay Sharma]

Dear Sir,

 We are exporting the Automobiles parts on payment of Excise duty and subsequently claiming the rebate of excise duty paid at the time of Export and while procuring inputs we are claiming the CENVAT credit of the excise duty paid on Inputs.

 Questions need to be answered—

 In your view, is it appropriate to deposit the Excise duty and then claim the same as rebate? ,

1.  Should we stop the export on payment of duty and subsequent claiming of rebate, because in this scheme we are getting only our hard earned money back which we deposited as excise duty from the excise department after a considerable time, no value addition?
2. Alternatively, and most importantly, should we opt Export without payment of Excise duty under LUT and then claim (i) Refund of CNVAT credit accumulated on account of non-payment of duty on export, (ii) claim Duty Draw Back under All Industry Rate?

 Pls. give us your valuable opinion about above situation and guide us which scheme we should go for.

 Thanks and Regards,

Sanjay Sharma.   

AI Summary

Exploring Excise Duty Options for Exported Auto Parts: Pay and Claim Rebates or Use LUT for CENVAT Refunds? A user inquired about the best approach for handling excise duty on exported automobile parts, questioning whether to continue paying excise duty and claiming rebates or to export without paying duty under a Letter of Undertaking (LUT) and claim CENVAT credit refunds and duty drawbacks. Respondents advised that if CENVAT credit cannot be adjusted domestically, paying duty and claiming rebates is viable, though it incurs expenses. For 100% exports, it was suggested to claim refunds of accumulated CENVAT credit under Rule 5, considering the absence of domestic sales. Additional guidance on duty drawbacks and input procurement without duty was also provided.