Rebate of Duty Admissible Both on Inputs i.e raw materials and Final Goods

Advocate Anandaday Misshra

Supreme Court of India while interpreting Rule 18 of Central Excise Rules, 2002, which is for rebate of excise duty, has held in the case of  Spentex Industries Ltd. Vs. Commissioner of Central Excise that Rebate of Duty is Admissible Both on Inputs i.e raw materials and Final Goods.

Rule 18 Rebate of duty.- 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 and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.

It analysed the usage of the word ” or ” in Rule 18 and held as below :

(iv) Interpretation of word ‘OR’ occurring in Rule 18: The aforesaid discussion leads us to the only inevitable consequence which is this : the word ‘OR’ occurring in Rule 18 cannot be given literal interpretation as that leads to various disastrous results pointed out in the preceding discussion and, therefore, this word has to be read as ‘and’ as that is what was intended by the rule maker in the scheme of things and to carry out the objectives of the Rule 18 and also to bring it at par with Rule 19.