Prathiba M. Singh ORDER
Prathiba M. Singh, J.
Question involved
1. The short issue arising in the present case is : Whether the petitioner is entitled to rebate of duty under Rule 18 of the Central Excise Rules, 2002 ("CER"), having availed of the benefit of Notification No. 93/2004-Cus : MANU/CUST/0150/2004 dated 10th September, 2004 issued under Section 25(1) of the Customs Act, 1962 ('CA') ("Notification No. 93")
Background facts
2. The background facts are that the petitioner is a manufacturer of various models of tractors. The tractors which are so manufactured, are sold both in the domestic market and are also exported. The present petition involves models of tractors exported by the petitioner during the period 2006 to 2008.
3. The petitioner claimed rebate of duty by invoking Rule 18 of the CER, vide its letter dated 26th July, 2004. The Assistant Commissioner, Central Excise Division, Phagwara vide letter dated 28th October, 2004 approved the input/output norms declared by the petitioner, upon verification, for the purpose of claiming of rebate of duties.
4. Petitioner filed 39 rebate claims claiming rebate of duties for its exports during the relevant period. The said claims were not allowed. However, show cause notices were issued by the Deputy Commissioner, Central Excise and Service Tax, Large Taxpayer Unit, New Delhi. Vide order dated 30th September, 2010 the said show-cause notices were adjudicated and the claims of the Petitioner were rejected.
5. The petitioner preferred 39 appeals before the Commissioner, Central Excise (Appeals) ['CCE (A)'], which were dismissed vide order dated 29th February, 2012. Petitioner thereafter approached the Revisional Authority ('RA'), i.e., Joint Secretary, Government of India, Ministry of Finance, Department of Revenue, New Delhi, who vide order dated 24th February, 2014 dismissed the revision application.
The present petition
6. The petitioner has filed the present writ petition seeking quashing of the said order passed by the RA and prays for its rebate claims to be allowed.
Relevant Provisions/Notifications
7. Rule 18 of the CER, 2002 reads as under:-
"Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfilment of such procedure, as may be specified in the notification.
Explanation.-For the purposes of this rule, "Export", with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India and includes shipment of goods as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft."
8. The relevant portion of the Notification No. 93 reads as under:-
"In exercise of the powers conferred by Sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India against an Advance Licence issued in terms of paragraph 4.1.3 of the Foreign Trade Policy (hereinafter referred to as the said licence) from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and form the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon, respectively, under sections 3, 8 and 9A of the said Customs Tariff Act, subject to the following conditions, namely:
...............................
(v) that the export obligation as specified in the said licence (both in value and quantity terms) is discharged within the period specified in the said licence or within such extended period as may be granted by the Licensing Authority by exporting resultant products, manufactured in India which are specified in the said licence and (in respect of which facility under rule 18 or sub-rule (2) of 19 of the Central Excise Rules, 2002 has not been availed)
Provided that an Advance Intermediate Licence holder shall discharge export obligation by supplying the resultant products to ultimate exporter in terms of Paragraph 4.1.3(b) of the Foreign Trade Policy;"
Submissions of the Parties
9. Mr. Rupesh Kumar, learned counsel for the petitioner, submitted that tractors manufactured by the petitioner consist of both indigenous components and imported components. It is his stand that they are in the proportion of 85:15 respectively in the petitioner's products. He submits that Rule 18 of CER is independent of any other notification. In other words, availing of the said rebate under Rule 18 is not dependent upon Notification No. 93.
10. Mr. Kumar further submits that the Central Excise Act, 1944 ('CEA') and the Customs Act, 1962 ('CA') are self-contained enactments. The availing of rebate duty by the petitioner under the CEA is not contingent upon any notification issued under the CA. Mr. Kumar refers to the order dated 24th February, 2014 of the RA and states that the RA has merely relied upon the earlier order being GOI Revision Order No. 09-37/11-Cx dated 18th January, 2011 and reiterated the same reasoning as given in the said order. He also submits that the benefit given to an applicant under Rule 18 CER is not interlinked with any other benefit or licenses. However, the RA has held to the contrary.
11. Mr. Sanjeev Narula, learned Senior Standing Counsel appearing for the respondent has contended that the conditions in the Advance Licenses issued to the petitioner under the CA have to be adhered to by the petitioner. Advance Licenses were issued to the petitioner to import goods upon which no customs duty was imposed under the condition that there would be corresponding exports made in terms of the value and quantity prescribed in the said licenses.
12. Mr. Narula submits that the petitioner having prayed for discharge of the said Advance Licenses upon effecting exports, cannot avail the double benefit of rebates under Rule 18 CER. The whole of the duty of customs having been exempted qua the imports made by the petitioner, the petitioner is duty bound to comply with the conditions in the said licenses. It is his submission that while seeking discharge of the said advance licences, the entity availing the discharge has to assure that in respect of the said exports, benefit under Rule 18 CER has not been availed. The petitioner, having availed of benefits under Notification No. 93, cannot claim rebate of duty under Rule 18 CER. He submits that the petitioner had imported the material without payment of duty under Advance Authorization Scheme ('AAS') and had used the same in the manufacturing of exported goods.
13. In response to the submission that the statutes are independent of each other, Mr. Narula submits that indirect tax levies viz., Excise, Customs and Cenvat Credit etc. move seamlessly between each other and they form a part of the broader canvas. A person, who has availed the benefit under Notification No. 93, is doing so, under the clear understanding that the rebate of duty under Rule 18 CER would not be available.
Analysis and Findings
14. It is the admitted position that the petitioner has availed the benefits under the Advance Authorizations by importing input material and exporting the manufactured goods. The petitioner has, thus, availed of the benefit of non-payment of customs duty on the whole of the imports which it made during the relevant period. The discharge of the Advance Authorizations given in favour of the petitioner was as per Notification No. 93 of 2004.
15. The submission of the petitioner, that availing of the benefit under Rule 18 of CER is not dependent or contingent upon any other notification or obligation, is incorrect. Rule 18 is a rebate, which is subject to such conditions or limitations, as may be stipulated.
16. In the present case, there is a categorical reference to Rule 18 in Notification No. 93. It is a conscious and deliberate inclusion, inasmuch as, the policies envisaged in Rule 18 of the CER and Notification No. 93 is grant of rebate on payment of excise and exemption from payment of customs duty respectively. A party cannot be allowed to avail of both the exemptions when clearly, the intention seems to be to permit only one exemption.
17. The reference to Rule 18 and 19(2) in Notification No. 93 clearly reveals that non-payment/rebate of either excise duty or customs duty is being granted to encourage exports. Once an export transaction has been used for seeking discharge of Advance Authorizations issued under the CA, the same export transaction cannot be used for seeking rebate of duty under CER, as the rebate, in this case, is subject to the conditions and limitations, as specified in Notification No. 93, which clearly requires that 'the facility under Rule 18 or Sub-rule (2) of 19 of CER, 2002' ought not to have been availed. The Petitioner's right to seek rebate is clearly limited by this condition and hence it is not entitled to rebate under Rule 18 CER.
Conclusion
18. In view of the above, we find no error in the order dated 24th February, 2014 of the RA. The petitioner is not entitled to the relief prayed for.
19. The writ petition is dismissed, with no order as to costs.
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