Rebate Authority Can't Review Assessment

Centax Editorial Board

July 17, 2025

• 2 min. read

Case Details: Laxmisagar Tradelink Pvt. Ltd. Versus Union of India (2025) 32 Centax 96 (Guj.)

Judiciary and Counsel Details

Bhargav D. Karia & D.N. Ray, JJ.
S/Shri Sudhanshu Bissa with Paresh M. Dave, for the Petitioner.
Shri Maunil G. Yajnik, for the Respondent.

Facts of the Case

The petitioner, a merchant exporter, exported goods on payment of duty and filed a rebate claim under Rule 18 of the Central Excise Rules, 2002 for refund of duty paid on the export goods. The jurisdictional authority partially sanctioned the claim, disallowing the differential amount between the assessable value and the Free on Board (FOB) value, and allowed re-credit of the disallowed amount in the Cenvat account. The petitioner contended that, as per Circular No. 510/06/2000-CX, dated 03-02-2000, the rebate sanctioning authority was required only to examine the admissibility of the rebate of duty paid on export goods covered by the claim and not to examine the correctness of the assessment. It was further contended that allowing re-credit in the Cenvat account was meaningless for a merchant exporter who did not maintain any Cenvat Credit account. The matter was accordingly placed before the Gujarat High Court.

High Court Held

The High Court held that, in terms of Circular No. 510/06/2000-CX, dated 03-02-2000, the rebate sanctioning authority should not examine the correctness of assessment but should only examine the admissibility of the rebate of duty paid on the export goods covered by a claim. The Court further held that allowing re-credit in the Cenvat account is meaningless in the case of a merchant exporter who does not maintain any Cenvat Credit account. Therefore, the differential amount between the assessable value and the FOB value, representing the differential rebate amount, is required to be allowed in cash to the petitioner.