Imported goods procured from local dealers by SEZ - Rebate under Rule 18 of CE Rules is not admissible - No error in rejection of rebate by Revenue: HC
By TIOL News Service
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AHMEDABAD, DEC 24, 2015: THE petitioner company is a unit working under the Special Economic Zone, manufacturing pharmaceutical products. The petitioner company has purchased the raw materials from various local dealers/traders who have either imported such raw materials from foreign countries or procured the same from local manufacturers. It is the case of the petitioner that since the goods are exported to the petitioner company by the DTA supplier, the petitioner is eligible to claim the rebate of duty as in the present case the supplier has given disclaimer certificate in favour of the petitioner company. The petitioner company, therefore, lodged a rebate claim of the duty suffered on the raw materials received by the supplier on payment of duty including CVD. The petitioner filed rebate claims under rule 18 of the Central Excise Rules, 2002 for the amount of the duty paid on the goods, which are ultimately supplied by the DTA dealers or manufacturers for the period from February, 2010 to August, 2011.
The petitioner's claim for rebate was disallowed on the ground that rebate shall be available only on the goods manufactured and processed in India and in the present case the goods were imported by the dealer and no further processes were undertaken and straightaway transferred to the petitioner company. The petitioner being of the confirmed opinion that the goods supplied to the SEZ unit or developer are export for the supplier and import for them and hence rebate is well within its rights, once again submitted all the claims with the authorities, but till date there was no positive outcome. Being aggrieved by the inaction on the part of the respondents, the petitioner has filed the present petition for quashing and setting aside the communication dated 18th May, 2011 of the Assistant Commissioner, Central Excise, Ahmedabad-II and seeks a declaration that the petitioner is eligible to get the rebate claim.
After hearing both sides, the High Court held:
+ In case of the petitioner, the goods in respect of which rebate is sought under the notification are raw materials which have been imported from foreign countries or procured locally from local manufacturer. The claim for rebate has been lodged on the goods received by the supplier on payment of duties including CVD. It is the case of the petitioner that the dealers have imported the goods and paid all duties including CVD, which is equivalent to the central excise duties as if the goods are manufactured in India. However, as rightly contended by the Standing Counsel for the respondents, the Countervailing Duty paid at the time of import of goods is a duty equal to the central excise duty leviable on such goods if manufactured in India. Such duty is levied to offset the disadvantage to like Indian goods due to high excise duty on their inputs and to provide a level playing field to indigenous goods which have to bear various internal taxes. However, such duty is not an excise duty.
+ It is by now well settled that in a taxing statute there is no scope of any intendment and the same has to be construed in terms of the language employed in the statute and that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the rules and the notification. The procedure laid in the notification dated 06.09.2004 provides for sealing of the goods and examination at the place of the despatch . Undisputedly, in the case of the present petitioner, no such procedure has been followed. Moreover, the notification defines duty for the purpose of the notification to mean the excise duty collected under the enactments stated therein. Undisputedly, the duties paid by the petitioner in relation to the goods in question do not fall within the enactments stipulated in the notification. Clearly therefore, the petitioner has failed to satisfy the basic requirements for availing of the benefits under the notification.
+ As can be seen from the impugned communication dated 18th May, 2011, the authority concerned has given detailed reasons as to why the applications for rebate made by the petitioner cannot be accepted. This court, does not find any infirmity in the impugned communication so as to call for intervention. Under the circumstances, the petitioner is not entitled to any declaration to the effect that it is eligible for getting the rebate claim as sought for in the petition.
(See 2015-TIOL-2880-HC-AHM-CUS)
