Central Excise - Rebate - Both inputs and final products are entitled for rebate - 'OR' means 'AND': Supreme Court Rejects Revenue Review Petition
THE basic question of law is as to whether or not the manufacturer/exporter is entitled to rebate of the excise duty paid both on the inputs and on the manufactured product, when excise duty is paid on a manufactured product and also on the inputs which have gone into manufacturing the product and such manufactured product is exported?
Rule 18. Rebate of duty. - 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 fulfillment of such procedure, as may be specified in the notification.
The Rule stipulates that the Central Government may, by notification, grant rebate of duty paid on such excisable goods OR duty paid on material used in the manufacturing or processing of such goods. The word 'OR' which is used in between the two kinds of duties in respect of which rebate can be granted is the bone of contention and it is to be interpreted whether it postulates grant of one of the two duties or both the duties can be claimed.
The Supreme Court in the Spentex Industries case emphatically held, "The inevitable conclusion is that the exporters/appellants are entitled to both the rebates under Rule 18 and not one kind of rebate."
The aggrieved Revenue agitated the matter again in a review petition in the Supreme Court.
The Supreme Court recently held, "We find no error, much less apparent,in the judgment impugned. The review petitions are,accordingly, dismissed."