Automobile Cess – no rebate – And for export under LUT, pay the cess - clarifies CBEC
Board has come to know that in certain cases the Department has sanctioned the rebate of automobile cess paid on the goods exported on payment of duty even though it is not covered under the Explanation in the notification No. 19/2004 CE(NT) dated 06.09.2004. And Board is not exactly happy with this and clarifies that
Rebate of excise duty is governed by rule 18 of the Central Excise Rules, 2002, which states that the Government by notification may grant rebate of duty paid on excisable goods exported subject to the conditions or limitations imposed and the procedure specified in the said notification. Accordingly, notification no. 19/2004-CE(NT) dated 06.09.2004 has been issued under rule 18. Further, for the purpose of this notification the term ‘duty’ has been defined in the Explanation I. Therefore, rebate of only those duties, which are included in this Explanation can be given as rebate on exported goods.
Further, rule 3 of the Automobile Cess Rules, 1984 cannot be applied for grant of rebate as rebate on goods exported is governed by rule 18 of the Central Excise Rules, 2002 read with notification No. 19/2004 CE(NT) dated 06.09.2004 and not by rule 3 of the Automobile Cess Rules, 1984.
Therefore, since notification no. 19/2004-CE(NT) does not specify automobile cess as ‘duty’ for the purpose of granting rebate, the rebate of automobile cess cannot be granted. This interpretation would be applicable for all types of cesses.
And the Board does not stop there. It further clarifies that where goods are exported under bond, without payment of duty, the applicable ‘cess’ is liable to be paid unless it is exempted by a notification. Necessary steps may be taken to safeguard the revenue.
There could be a large number of Show Cause Notices in the pipeline.