Exports – rebate of input stage credit as well as final products – not eligible?
In a major blow to the exporters, the Bombay High Court has held that exporters are eligible for rebate on the duty paid either on the inputs or the final products but not both. The court was interpreting Rule 18 of the Central Excise Rules, 2002:-
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.
Because of the word, “or” in the rule, the High Court held that only one of the benefits could be allowed. This is the result of benevolent simplification to make the assessee’s life simpler! As long as the Central Excise Rules, 1944 ruled the roost, there was no problem, and simplification has taken away another benefit. Is it fair on the part of the government to take the matter to the High Court when they knew all along that rebate was and should be allowed on both the items? Should the assessees suffer for the deficiency in English of the officers in the Board? First the government makes a bad law because of a mistake, because somebody’s English grammar was poor and then they go to Court to get benefit out of the badly drafted law! Certainly not an act worthy of a government! Please see our breaking news for details of the case.