Circular No. 462/28/99-CX, dated 21/6/1999

F.No.209/64/98-CX.6
Subject : Rebate of excise duty paid on processed textiles fabrics notified under section 3A of the Central Excise Act, 1944 for the period 16.12.98 to 15.2.99 - Instructions regarding

I am directed to say that a doubt has arisen whether the rebate of central excise duty paid processed textiles fabrics notified under section 3A of the Central Excise Act, 1944 for the period 16.12.98 (the day processed fabrics were covered were covered under this levy based on capacity of production) and 15.2.99 (the preceding day to the date when notifications providing method of computation of rebate were issued) can be granted in respect of the goods removed from the factory of independent manufacturers and exported or the raw material removed from the factory of independent manufacturers for manufacture of export goods, during this period and whether the rates / method of computation of rebate prescribed in Notification nos. 11/99 (NT) to 13/99 (NT) all dated 16.2.99 [hereinafter referred to as the said notifications] can be applied for granting of such rebates.

2. An identical situation exists in the case of export of specified processed textile fabrics of cotton and man-made fibre which were notified by notification No. 2/99-CE (N.T.) dated 13.1.99 under section 3A, but were included in Notification Nos. 31/98-CE(N.T.) dated 24.8.98, 42/94-CE (N.T.) dated 22.9.94 and 50/94-CE (N.T.) dated 22.9.94 on 11.5.99 by notification No. 30/99-CE(N.T.) so as to apply the same formula to determine the rebate. The relevant period under consideration is from 13.1.99 to 10.5.99 concerning exports of these goods.

3. The Board has examined the matter in consultation with Ministry of Law, Justice and Company Affairs. It is seen that the right to get rebate on exports emanated from rule 12 read with notification No. 41/94-CE (N.T.) dated 22.9.94 in case of export of finished excisable goods, notification No. 42/94-CE (N.T.) dated 22.9.94 in case of raw materials used in the manufacture of export goods and notification No. 50/94-CE (N.T.) dated 22.9.94 in case of exports to Nepal. However after the goods were notified under section 3A, the identification of the duty paid on exports became difficult, the said notifications were issued which simply provide a formula to ascertain the duty content on the export and other usual procedures. These notifications neither create a right nor affect the pre-existing right to avail the rebate of duty. Hence, the said notifications are not hit by the principles of retrospectivity.

4. In view of the above legal position, the Board has decided that the exporters of the said goods will be entitled for rebate under rule 12 of the Central Excise Rules in respect of said goods cleared from the factory of independent manufacturers and exported during 1.8.97 (inclusive to 23.8.98 and the formula for computation of rebate and other procedures prescribed in the said notifications should be applied while granting such rebates. Similarly, the exporters of specified processed textile fabrics of cotton and man-made fibre which were notified by Notification No. 2/99-CE (N.T.) dated 13.1.99 under section 3A will be entitled for rebate in respect of the said goods cleared from the factory of independent processors and exported during the period 13.1.99 (inclusive) to 10.5.99.

5. The Board further desires that the Trade/exporters and the field formations may be informed quickly about this decision. The exporters will be allowed to submit additional calculation sheet based on the formula prescribed in the said notifications even in cases where they filed rebate claims earlier and are lying pending with the Department. All rebate claims pertaining to the period in question should be taken on priority basis.

6. Any difficulty experienced in the regard may be brought to the notice of the Board immediately.

Sd/-
(P K Sinha)
Under Secretary (CX.6)

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