In a ruling in favour of Volvo Groups, the Bombay High Court held that non-filing of declaration & input-output ratio is not a pre-condition for claiming rebate on excise of exported goods. It was clarified that just because the verification of input-output ratio was not submitted before the export of goods, it does not mean that the same cannot be verified post export of goods.
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The Petitioner had purchased chassis from its sister concern, Volvo India Pvt Ltd, which was subjected to excise duty at the time of removal of the same from the factory of Volvo India and same was recovered from petitioner along with the sale price. The Petitioner manufactured the buses by using the said chassis and cleared the same for export without payment of duty. In the meanwhile, the petitioner made an application for a rebate of Rs.53,65,198/- being basic excise duty, education cess & higher education cess by virtue of Notification No. 21/2004-CX(NT) dated Sep 06, 2004.
The fourth respondent/ Assistant Commissioner of Central Excise however, rejected the rebate claim primarily on the ground that petitioner had not filed the declaration and Form ARE-2 as required under the Notification No.21/2004 and consequently the verification of input-output ratio could not be done. Since the rejection order was upheld by the Revisional authority, the petitioner approached the High Court.
The Division Bench of Justice K. R. Shriram and Justice Jitendra Jain observed that the procedure for submitting input-output ratio is inconsequential for claiming rebate under Central Excise Act when the claim of petitioner/ assessee is only qua excise duty paid on chassis purchased and used in the manufacture of buses which are exported.
The Bench viewed that verification of input-output ratio although not submitted before the export of goods cannot mean that the same cannot be verified post export. Further clarified that procedure for submitting input-output ratio is inconsequential in the facts of the present case, since the claim of petitioner is only qua excise duty paid on chassis purchased and used in the manufacture of buses which are exported.
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Further held that rebate claim of Petitioner is required to be examined on merits and if found eligible can certainly be considered under Rule 18 of the Central Excise Rules, added the Bench. The Bench quashed the order and directed that the rebate shall be given upon petitioner tallying the details of chassis purchased with details of chassis exported with the buses.
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