M/S. SPENTEX INDUSTRIES LTD versus COMMISSIONER OF CENTRAL EXCISE & ORS.

Citation: [2015] 11 S.C.R. 487 · Decided: 09-10-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2015] 11S.C.R.487 
M/S. SPENTEX INDUSTRIES LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE & ORS. 
(Civil Appeal No.1978 of 2007) 
OCTOBER 09, 2015 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
A 
B 
Central Excise Rules, 2002 - rr. 18, 19 - Rebate of duty C 
- Claim. of, by exporter of manufactured product - Excise 
duty paid on a manufactured product and also on the inputs 
which have gone into manufacturing the product - Held: 
Exporters are entitled to both the rebates u/r. 18 and not one 
kind of rebate - Notification No. 1912004-CE(NT) dated D 
September 06, 2004 and Notification No. 21/2004-CE(NT)" 
dated September 06, 2004. 
Allowing the appeals, the Court 
E 
HELD: 1.1 The High Court did not take correct view, 
which is a myopic view and ignores the overall scheme 
pertaining to grant of rebate in respect of goods exported 
out of India. The exporters-appellants are entitled to both 
the rebates under Rule 18 of the Central Excise Rules, F 
2002 and not one kind of rebate. The impugned 
judgments are set aside. [Para 16, 27] [500-H; 501-A; 
512-F-G] 
1.2 the multiple reasons for arriving at the said G 
. conclusion are as follows: 
(i) Historical perspective of the statutory 
scheme:The historical narration of the relevant 
provisions from time to time depict one common theme, 
487 
H 
488 
SUPREME COURT REPORTS 
[2015] 11 S.C.R. 
A namely, to provide rebate of duty paid on the excisable 
goods as well as the duty paid on material used in the 
manufacture of goods. [Paras 16, 19] [ 501-B; 503-G] 
(ii) Scheme of the Rules: Rules 18 and 19 of the 
B Rules, 2002 provide two alternatives to the exporter 
enabling him to get the benefit of exemption from paying 
the excise duty. Under Rule 19, exporter is not required 
to pay any excise duty_ at all. At the time of removal of 
these goods from the factory gate of the producer or the 
C manufacturer or the warehouse or any otlier premises, 
he is supposed to comply with the conditions, 
safeguards and procedure, as may be notified by the 
Board. Such a procedure provides for execution of a 
bond which, inter alia, lays down the condition that the 
D goods which are cleared are actually meant for export 
and he is to furnish the proof that those goods are 
actually exported. What is important is that when the 
exporter opts for this method, with the approval of the 
Commissioner, he is not required to pay duty either on 
E the final product, i.e., on excisable goods or on the 
material used in the manufacture of those goods. The 
intention is loud and clear, namely, the goods which are 
meant for exports are free from any excise duty. It 
F extends not only to the material which is used in the 
manufacture of goods but also TO the goods that ate 
produced and ultimately exported. Once this scheme is 
kept in mind, it cannot be the-intention of the Legislature 
to provide rebate only on one item in case a particular 
G exporter/manufacturer opts for other alternative under 
Rule 18, namely, paying the duty in the first ins"tance and 
then claiming the rebate. Giving such restrictive meaning 
to Rule 18 would not only be anomalous but would lead 
to absurdity as well. In fact, it would defeat the very 
H purpose of grant of remission from payment of excise 
SPENTEX INDUSTRIES LTD.v. COMMISSIONER OF 
489 
CENTRAL EXCISE 
duty in respect of the goods which are exported out of A 
India. It may also lead to invidious discrimination and 
arbitrary results. [Para 19] [503-H; 504-A-H] 
(iii) Government's own perception: Rule 18 is 
enabling provision which authorises the Central 8 
Government to issue a notification for grant of these 
rebates. Exercising powers under this Rule, the Central 
Government has issued necessary notifications for 
rebate in respect of both the duties, i.e., on intermediate 
product as well as on the final product. Further, these c 
notifications providing detaiJed procedure for claiming 
such rebates contemplate a situation where excise duty 
may have been paid both on the excisable goods and 
on material used in the manufacture of those goods and 
enables the exporter to claim rebate on both the duties. D 
This kind of procedure and format of prescribed Forms 
becomes a clincher insofar as understanding of the 
Government of Rule 18 is concerned. It is to be borne in 
mind that it is the Central Government which has framed 
the Rules as well as issued the notifications. If the Central E 
Government itself is of th~ opinion that the rebate is to 
be allowed on

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