Case Analysis - Decision in the matter of:

M/s MUNOT TEXTILES reported in 2007 -TMI - 1051 - GOVERNMENT OF INDIA

Central Excise 

Manufacturer has exported goods through Merchant Exporter under claim of rebate. In the form ARE-1 (AR-4) Manufacture as well as Merchant Exporter has declared that no-duty drawback would be claimed. But, subsequent to clearance and export, Merchant Exporter has claimed duty drawback.

Department has rejected the claim of Manufacturer for claiming "Rebate" under Rule 18 of Central Excise Rules, 2001 (Central Excise Rules, 2002) read with Notification No. 40/2001 C.E.(NT) dated 26-6-2001.

In this matter, in a revision application made by the Manufacture, Government of India has held that action against Merchant Exporter could have been taken under the Customs & Central Excise Duties Drawback Rules, 1995 but there is no merit in rejecting the rebate claim of the Manufacture.

Therefore, "Rebate" shall be allowed to Manufacturer.

Rebate entitlement unaffected by merchant exporter's duty drawback claim; remedy for exporter conduct lies under drawback rules. A merchant exporter's subsequent claim for duty drawback does not automatically extinguish a manufacturer's entitlement to export rebate under the Central Excise rebate provisions; any action for the merchant exporter's conduct lies under the Customs and Central Excise Drawback Rules and should not be used to deny the manufacturer's rebate claim.