TaxTMI 
TaxTMI 
2016 (6) TMI 994
X X X X Extracts X X X X
X X X X Extracts X X X X
....iz., Hydraulic Gear Pumps falling under Chapter Sub Heading 84131990 of the Central Excise Tariff Act, 1985.The applicants have exported the said product and have filed rebate claims against the export made by them on payment of duty under rule 18 of the Central Excise Rules,2002. It was observed that there was deficiency in their rebate claim and accordingly deficiency Memo was issued. The applicants submitted their reply along with required documents on 1403.2011. On verification of the claim, the adjudicating authority denied an amount of Rs. 1,04,442/- to extent of remittance not received in foreign currency and sanctioned an amount of Rs. 1,64,738/- in cash and Rs. 8,671/-as Cenvat credit. 3 Being aggrieved by the said Order-in-Origin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Regulations, 2000 as the amounts are routed through Vostro account of the Foreign Bank. Further, receiving the export proceeds in Indian Rupees is also permitted under Foreign Trade Policy 2009-14 which specifically provide that where Indian Rupees received through Vostro Account of non-resident banks would be taken as export realization under export promotion schemes of FTP. On this ground alone, the order of the respondent may be set aside and refund be granted. 4.2 The applicant submit that the order of the respondent is legally untenable in as much the respondent has erroneously rejected the rebate on the ground of non receipt of consideration in foreign exchange. The applicant submit that there is no provision under Rule 18 of Central....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts would be allowed only if the export proceeds are realized in convertible foreign exchange The applicant submits that the Foreign Trade Policy(FTP) 2009-14 which governs the provisions relating to export and import of goods and services, provides that in case of export by Indian exported, the invoice could be denominated in Indian Rupees or in freely convertible foreign exchange. Further, FTP also provides for realization of export proceeds in Indian Rupees in certain cases. The applicant submits that the provisions permit the Indian exporter to invoice in Indian Rupees and also realize the sale proceeds in Indian Rupees from Vostro account of non-resident bank. In this context, it is relevant to understand the term 'Vostro Account....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... would hold an Indian rupee account with Indian bank (Vostro account). The provisions of FTP as well as FEMA refer to these Vostro Accounts of non-resident banks which remit the Indian Rupees which they are holding and such receipt of INR from Vostro Account of non-resident bank by the Indian bank on behalf of Indian exporter would be equivalent of receipt of foreign exchange and should be taken as export realization under export promotion schemes of FTP. 4.8 The applicant submits that the order of the respondent is erroneous and legally untenable in as much as there is no condition that rebate of duty on exports would be allowed only if the export proceeds are realized in convertible foreign exchange. The applicant submits that Rule 18 or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntained in para 240 of Foreign Trade Policy (FTP) 2009-14 and held that the applicant failed to comply with the condition of said provisions of FTP. The applicant on the other hand has stated that they have complied with the condition of FTP, Now, in view of rival contention, Government proceeds decide the issue in limit of above said provision of FTP. 8.1 The said provision 2-40 of FTP reads as under:- "All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency, However, export proceeds against specific exports may also be realized in rupee, provided it is through a freely convertible Vostro account of a non resident b....