2024 (8) TMI 88

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....nd was a 100% Export Oriented Unit [EOU] engaged in manufacture of welding machine tools/accessories. As an EOU, it was also registered as a private bonded warehouse under section 58 and 65 of the Customs Act, 1962. The appellant exported goods under claim of rebate after clearing them under four ARE-1 dated 01.07.2008, 29.06.2007, 02.07.2007 and 30.06.2007. The rebate claim was allowed by the Jurisdictional Officers and thereafter it was felt that the rebate was erroneously sanctioned. At the insistence of the department, the appellant deposited the entire amount of rebate sanctioned to it along with interest. The appellant, by letter dated 31.03.2008, informed the department that it intended to take credit of duty of Rs. 76,72,000/- against the goods exported through 36 invoices. This amount also included the amount of Rs. 7,88,553/- which had earlier been sanctioned as rebate to the appellant and which was repaid by the appellant. 4. The Assistant Commissioner, by letter dated 17.04.2008, intimated the appellant that it cannot be allowed to take the aforesaid credit of Rs. 76,72,000/-. However, the appellant took the credit, which was reflected in its returns. A show cause noti....

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....of section 11B of the CEA read with Rule 18 of Central Excise Rules, 2002 [CER] and section 142 (3) of CGST Act. This refund was sanctioned by the Assistant Commissioner by his order dated 06.05.2019. Revenue appealed against this sanction of refund, which was set aside by the Commissioner (Appeals) by the impugned order. Aggrieved, the appellant is before us. 8. Submissions on behalf of the appellant : The Commissioner (Appeals) passed the order failing to appreciate that rebate claims in respect of goods exported on payment of duty are maintainable under Rule 18 of the CER. The appellant had exported goods by filing rebate applications in prescribed format ARE-I. The goods were exported under claim of rebate on the advice of the Jurisdictional Officers and the Bond Officer under whose supervision the goods were removed from the factory. The appellant was working under physical control of the Jurisdictional Authorities being a 100% EOU and all ARE-1s indicate that the duty has been discharged under Rule 18. The goods are exported on payment of duty rebate is admissible and there is no restriction on claim of rebate by a 100% EOU. (2) Since the appellant had paid duty, it was ent....

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....llowing forms :- (a) Rebate of duty under Rule 18 of CER: If goods are exported the duty paid on them on manufacture and the duty paid on materials used in the manufacture is given to the exporter as rebate under this rule ; (b) Export under bond : As per Rule 19 of the CER, goods manufactured may be exported without paying any duty by executing a bond undertaking to export the goods after the removal from the factory. Once the goods are exported the bond gets discharged. This provision negates any amount of duty liability on the final products. Insofar as the duty paid on the inputs is concerned, the manufacturer can take it as Cenvat credit and utilize it ; (c) Refund of Cenvat credit under Rule 5 of the CCR : Where Cenvat credit is taken on inputs used in manufacture of final products which are finally exported, such credit can be utilized by the exporter to pay duty on other clearances of goods or it can claim refund as per Rule 5 of CCR. 12. In this case, the appellant had initially exported goods under claim for rebate. The appellant paid duty and then claimed rebate of the same under Rule 18. The rebate was initially sanctioned, but later, on the advice of the departm....

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....nder Rule 18 of the CER which is a refund of duty paid on exported goods. It is not a claim of refund of the duty paid on the materials used in the manufactured of exported goods. It was also not a claim seeking refund of Cenvat credit under Rule 5 of the Cenvat Credit Rules. Therefore, according to the learned authorized representative, the Assistant Commissioner erred in sanctioning refund under Rule 18, which was not admissible and the Commissioner (Appeals) was correct in setting aside the sanction order. The appellant, according to the learned departmental representative, could have transitioned the Cenvat credit available as on 30.06.2017 as ITC under GST under TRAN-I in terms of section 140 of the CGST Act, but it did not. Learned counsel for the appellant submitted that as per section 142 (4) of the CGST Act, 2017, any refund available under the erstwhile law (i.e. Central Excise Act) will continue to be governed by the provision of the erstwhile law. Since the unutilized Cenvat credit could be refunded under Rule 5 of the CCR, 2004 refund of the same is available under the same even after the introduction of the CGST. 18. We do find that the Assistant Commissioner sanctio....