https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=769682 https://www.taxtmi.com/caselaws?id=769682 Rejection of rebate claim - entitlement to claim rebate of excise duty paid on exported goods, while simultaneously claiming duty drawback on inputs under the Customs Central Excise Duties and Service Tax Drawback Rules, 1995 - double benefit - HELD THAT:- A double benefit would arise in a case where, for a single incidence, relief is availed more than once i.e. if relief is claimed more than once on the output side or if relief is claimed more than once on the input side. If relief is claimed only once on the output side and once on the input side then the same would not amount to a double benefit to the manufacturer/exporter. The benefits or reliefs available to the manufacturer/exporter on the input side are (i) rebate of input excise duty paid by the manufacturer/exporter to its vendors on the material purchased by it and used in the manufacture of exported goods in terms of Rule 18 of the Central Excise Rules, 2002 read with Notification No.19/2004; or (ii) drawback i.e. rebate of duty or tax chargeable on any imported material or excisable material or input service used in the manufacture of exported goods under the Drawback Rules of 1995. Rule 18 of the Central Excise Rules, 2002. A manufacturer/exporter is eligible to avail benefits on both the input side as well as the output side on exported goods. Doing so is not a double benefit. This is because the manufacturer/exporter is claiming reliefs against two separate tax incidences. On the input side, he is claiming relief of the taxes embedded in the inputs purchased by him for use in manufacture of exported goods. On the output side, he is claiming relief of output duty paid by him on the activity of manufacturing the exported goods. A double benefit would arise when a manufacturer/exporter claims multiple input side benefits or where a manufacturer/exporter claims multiple output side benefits - In the present case, the Petitioner has claimed i) output rebate under Rule 18 of the Central Excise Rules of the Excise Duty paid by it on the activity of manufacturing the exported goods and ii) on the input side, drawback at the All Industry Rate of 16% under the category of "Cenvat facility not availed". The Petitioner correctly availed on the input side drawback at the All Industry Rate of 16% under the category of "Cenvat facility not available". Hence, the Petitioner has correctly availed one input side benefit and one output side benefit. In the case of Spentex Industries Ltd. [2015 (10) TMI 774 - SUPREME COURT], the assessee- manufacturer used duty paid inputs for manufacture of goods which were finally exported after payment of Central Excise Duty. The rebate claims filed in respect of duty paid on inputs and on finished goods were rejected by the Department. This Court had taken a view that out of the two excise duties, Rule 18 of the Central Excise Rules, 2002 permits rebate only qua one of them and not on both the duties. Overruling the said decision of this Court, the Hon'ble Supreme Court was of the view that exporters are entitled to both input side and output side rebate under Rule 18 and not just one kind of rebate - in light of the decision of the Hon'ble Supreme Court in Spentex Industries Ltd., there is no double benefit availed by the Petitioner and the Petitioner has correctly availed one benefit on the input side and one benefit on the output side. The impugned order has completely conflated input and output side benefits. Drawback is an input side benefit granting to the Petitioner rebate of the duties/taxes embedded in the inputs purchased by it. Further, the Petitioner has claimed only output rebate under Rule 18 of the Central Excise Rules, 2002 and has not claimed any input side rebate under the said Rule 18. There is absolutely no bar in law nor is there a double benefit for the Petitioner to claim drawback on inputs and output rebate of the excise duty paid on the exported goods. Conclusion - The Petitioner is lawfully entitled to claim rebate on the excise duty paid on exported goods under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004, while also claiming duty drawback on inputs under the Drawback Rules, 1995, without it constituting double benefit. Petition allowed. Case-Laws Central Excise Fri, 25 Apr 2025 00:00:00 +0530