Grant of Rebate claim under Rule 18 of CER, 2002

PJ/Case Laws/2011-12/1154

Case: Texport Syndicate (India) Ltd v/s Joint Secretary, N.F. (DR)

Citation: 2011 (266) ELT 177 (Kar)

Issue:- Rebate claim cannot be denied on technical grounds.

Brief Facts:- Petitioner is a company engaged in the manufacture of readymade garments falling under Entry 68 of First Schedule. For the export of goods during the period 05.07.2004 to 20.09.2004, appellant filed for rebate of duty under Rule 18 of CER, 2002. Department issued show cause notice alleging that petitioner had violated the conditions of notification under Rule 19. Appellant contended that there was no violation, rather he is entitled for rebate on duty paid on the exported goods as per Rule 18.

Application was rejected. In appeal, The Commissioner (Appeal) allowed the application. Thereafter, the Assistant Commissioner extended the rebate against which Department filed revision.

The Revisional Authority allowed the revision setting aside the order allowing rebate. Hence, Petitioner is before the High Court for quashing the said Revisional order as illegal and contrary to Rule 19 of CER, 2002 readwith Notification dated 26.02.2001 and Section 11B of CEA, 1944 and to hold that the appellant are entitled to rebate.

Petitioner’s Contentions:- Petitioner contended that as per Rule 18 he is entitled to rebate of the duty paid by him on exported goods. His rebate application was rejected on technical ground stating that Rule 19 applies. It was submitted that even the amendment introduced provided for rebate. Any incidental articles used viz., pins, hangers, elastics for manufacturing and export is treated as goods exempted from duty. By virtue of the notification issued by the Central Government, rebate was extended to the petitioner.

Reasoning of Judgment:- The High Court held that as per Rule 19 any excisable goods can be exported without payment of duty from factory or warehouse, if approved by the Commissioner. It was held that in the present case, the Commissioner (Appeals) have rightly considered the incidental articles would not come within the duty liability, has exempted payment of duty on the incidental articles used for the purpose of exporting readymade garments. It was held that Explanation to Rule 18 includes the goods shipped. Deprivation of benefit of rebate on technical ground by the Revisional authority was erroneous.

Impugned Revision order set aside. Matter remitted to Assistant Commissioner to consider the incidental articles used like pins, hangars and elastics would form independent material over which duty has to be levied or it is incidental and it does carry any rebate and to pass appropriate orders.

Decision:- Petition allowed.

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PJ/Case Laws/2011-12/1154

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