Export rebate claims

CHATROOM

Minor discrepancies should not come in the way of grant of rebate if duty has been paid on the goods covered by ARE1 and the same have been exported.

We have purchased capital goods on excise duty payment. As per Cenvat Credit Rules, 2004, we can take credit of only 50 per cent of the duty in the first year and we can take the balance credit in any subsequent year. Also, we cannot take depreciation in respect of the amount of credit that we take. Our question is whether we can take credit of 50 per cent duty in the first year and in the same year take depreciation for the amount of balance credit that we have not taken?

This issue had come in the case of Suprajit Engineering Ltd. 2007 (212) ELT 394. The Division Bench of CESTAT had held that there is nothing in the rules which debars the assessee from availing depreciation on the balance 50% of duty, which is not availed as Cenvat credit.

Even though it appears that in the first year, they have violated the rules, the assessees have not violated the rules for the simple reason that in the first year, they had availed depreciation only in respect of that portion of duty on which they have not taken Cenvat credit, said the Tribunal. This judgment has been followed in the case of Roots Cast Private Ltd [2007 (216) ELT 448 (Tri.-Chennai)]

Recently, however, a single member of Bench of CESTAT, in the case of Pacific Organics Pvt. Ltd. [2007 (216) ELT 306 (Tri.-Mumbai)] differed with this view and referred the matter to a Division Bench.

In my view, it is better to await the decision of the Division bench.

Our export rebate claim has been rejected on the grounds that container number mentioned on the bill of lading does not tally with that mentioned in ARE1 and that seal number mentioned on mate receipt is different from that given in ARE1. The goods were cleared after examination by our Excise Superintendent, who has sealed the container. We have explained that there is only typographical error in the mate receipt and tendered a letter from shipping company that the container number is wrongly mentioned in bill of lading. Can you guide how we can proceed?

So long as the duty has been paid on the goods covered by ARE1 and the goods actually covered by the ARE1 have been exported, minor discrepancies should not come in the way of grant of rebate. You may appeal on the basis of the Government of India, Revisionary Authority decision in the case of Audler Fasteners [2007 (216) ELT 465 (GOI)] on similar facts.

I am proprietor of a manufacture of a small unit and also partner of another small manufacturing unit. The activities of both units are different but they are functioning from the same premises and separately availing exemption up to clearances of Rs. 1.5 crores. The excise authorities say that the clearances of both units need to be clubbed.

Mere functioning from the same premises is not adequate to warrant clubbing of clearances of the two units.

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