2022 (2) TMI 1380

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....r. Ankur Mathur JUDGMENT By the Court : ( Per Akil Kureshi , CJ ) : These petitions arise out of a similar background. They have been heard together and would be disposed of by this common judgment. 2. Material facts being similar, we may notice them as arising in D.B. Civil Writ Petition No. 18117/2019. The petitioner is a limited company and is engaged in the business of manufacture and export of Yarn. The petitioner had exported such product during the year 2013-14 and claimed duty drawback at a higher rate as per the Customs department's notifications. The petitioner also made a separate rebate claim before the Excise Department. The Assistant Commissioner of Excise issued a show cause notice dated 12.02.2014 calling upon the petitioner to explain why such rebate claim should not be rejected. His main ground for proposing rejection of the petitioner's rebate claim was that the petitioner had availed higher rate of drawback for the export which is available only when Cenvat facility has not been availed. In the present case, according to the Assistant Commissioner, the assessee had failed to establish that it satisfied the condition No.15 of the notification No.92/2012 da....

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..... This does not amount to breach of any of the conditions for claiming the rebate and in particular condition No.15 of the notification dated 04.10.2012. They submitted that the decision of Madras High Court in the case of M/s. Raghav Industries (supra) does not laid down correct law. Heavy reliance was placed on the decision of the Supreme Court in the case of M/s Spentex Industries Ltd. vs. Commissioner of Central Excise and others, (2016) 1 SCC 780, in which it was held that an exporter is entitled to claim rebate of excise duty paid not only on the inputs used for manufacture of export goods but on the final product also. The decision of Bombay High Court taking a contrary view was reversed. 8. On the other hand, the stand of the department is that the petitioner having claimed the drawback on the export goods at higher rate, was not entitled to thereafter claim rebate on the duty paid. Learned counsel submitted that the petitioner is claiming double benefits. By virtue of claiming duty drawback, the duty paid by the petitioner earlier was neutralized. Thus, the petitioner had not borne any duty on the export goods. The question of granting rebate under such circumstances ther....

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....o a foreign port or supplied to a foreign going aircraft] Rule 19. Export without payment of duty.- (1) Any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the [Principal Commissioner or Commissioner, as the case may be]. (2) Any material may be removed without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be approved by the [Principal Commissioner or Commissioner, as the case may be]. (3) The export under sub-rule (1) or sub-rule (2) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board." 12. As per these rules thus, an exporter has an option either to claim duty free exports under Rule 19 or first pay the duty and thereafter claim rebate thereof as is provided in Rule 18. Apparently, the petitioner had claimed the rebate meaning thereby, the petitioner had paid the duty on the goods at the time of export. Perusal of Rule 18 would show that such rebate would be g....

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....he conditions, safeguards and procedure, as may be notified by the Board. Such a procedure provides for execution of a bond which, inter alia, lays down the condition that the goods which are cleared are actually meant for export and he is to furnish the proof that those goods are actually exported. What is important is that when the exporter opts for this method, with the approval of the Commissioner, he is not required to pay duty either on the final product, i.e., on excisable goods or on the material used in the manufacture of those goods. The intention is loud and clear, namely, the goods which are meant for exports are free from any excise duty. It extends not only to the material which is used in the manufacture of goods but also on the goods that are produced and ultimately exported. Once we keep in mind this scheme, it cannot be the intention of the Legislature to provide rebate only on one item in case a particular exporter/manufacturer opts for other alternative under Rule 18, namely, paying the duty in the first instance and then claiming the rebate. Giving such restrictive meaning to Rule 18 would not only be anomalous but would lead to absurdity as well. In fact, it w....