A manufacturer-exporter can claim both input and output benefits without constituting double benefits, as they relate to different tax incidences.

JUDGMENT :

FIRDOSH P. POONIWALLA, J.

1. Rule. Rule made returnable forthwith. Heard finally by consent of the parties.

2. By the present Petition, the Petitioner challenges the Order dated 30^th November 2021 passed by Respondent No.2 rejecting the rebate claim filed by the Petitioner.

3. The Petitioner is, inter alia, engaged in the manufacture of Draw Texturised Yarn (DTY) falling under Chapter Heading 5406 & Polyester Staple Fibre (PSF) falling under Chapter Heading 5506. The Petitioner is undertaking the manufacturing activity in its factory premises situated at A-31, MIDC Industrial Area, DTY Division, Butibori, Nagpur.

4. During the period January 2008 to April 2008, the Petitioner cleared its final products within India on payment of excise duty. Apart from this, during this period, the Petitioner also cleared a part of its production for export on payment of excise duty.

5. It is the case of the Petitioner that, at the time of receipt of inputs within the Petitioner' factory premises, it was not possible to know as to whether the inputs would be used in the manufacture of final products cleared within India or exported by the Petitioner. Hence, the Petitioner had taken Cenvat credit of the duty paid on all the eligible inputs at the time of receipt in their factory. However, at the time of clearance of goods for export, the Petitioner reversed the Cenvat credit on inputs used in the finished goods exported. In other words, the Petitioner did not avail Cenvat credit of the duty paid on inputs used in finished goods that were exported.

6. In respect of inputs contained in the goods exported during the period January 2008 to April 2008, the Petitioner claimed drawback at the All Industry Rate on inputs under Customs Central Excise Duties and Service Tax Drawback Rules, 1995. (hereinafter referred to as the “Drawback Rules of 1995”). The Petitioner claimed drawback at the rate then prevailing, i.e., 16% which was the rate applicable when Cenvat credit has not been claimed. This was claimed since credit of duty paid on inputs used in finished goods was reversed / surrendered at the time of clearance of finished goods for export.

7. The Petitioner cleared consignments of the final products on payment of central excise duty for export under the claim of rebate under Rule 18 of Central Excise Rules, 2002. The Petitioner paid excise duty on the goods exported through accumulated Cenvat credit balance lying in the Cenvat account of the Petitioner. It is the case of the Petitioner that this credit did not pertain to the inputs purchased and used in the manufacture of exported goods. This credit arises out of completely unrelated transactions such as the purchase of inputs for the manufacture of goods sold domestically in India.

8. Therefore, the Petitioner claimed the following two benefits in relation to exports to relieve the burden of taxation on exported goods:

(i) Output stage: Rebate of the excise duty paid on the finished goods in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-CE(NT) dated 6.9.2004;

(ii) Input stage: Drawback of customs duty and excise duty at then prevailing rate of 16% being the rate applicable when cenvat credit had not been claimed.

9. The Petitioner had not availed credit of duty paid on inputs used in exported goods. Also, the Petitioner did not avail rebate of the duty paid on inputs used in export goods, in terms of Rule 18 of the Central Excise Rules, 2002.

10. The Petitioner filed rebate claims in respect of the excise duty paid on the exported goods, in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-CE(NT) dated 6.9.2004 (hereinafter referred to as “Notification No.19/2004”).

11. During the period January 2008 to April 2008, the Petitioner filed 297 rebate claims totaling to Rs.10,89,69,730. The Petitioner has annexed as Exhibit "B" to the Petition the table showing details of the 297 rebate claims filed by the Petitioner. The Petitioner als