CX - Rule 18 accords rebate of duties paid on goods that are exported & do not distinguish between exempted goods and dutiable goods - lower authorities have erred in adopting approach which is redolent of opportunism: CESTAT

The subject judgement contains the following observation:
'It is the stated doctrine in tax administration that domestic taxes are not exported with goods.'
The judgement does not state as to in which provision of law the said 'doctrine' is 'stated'. It is also hard to fathom the basis of elevating the said statement to the status of ' doctrine'. As the said 'doctrine' has been found mentioned in several judgements, it is appropriate to indulge in a brief purgatory exercise.
The GOI rebates/refunds indirect taxes in relation to the exported goods wherever/ whenever it deems it to be in public interest so to do. It is done only when it is in public interest and not in pursuance of any such 'doctrine'. Indirect taxes on petroleum products used in the manufacture of exported goods are not rebated/refunded, ( these taxes are not cenvatable either), and thus, in effect, are exported. Obviously the GOI does not consider it in public interest to do so. Also on several goods, export duties are imposed which constitute clear examples of export of indirect taxes. While a longer discourse may be in order, for the purpose of this comment, suffice to say that the 'stated doctrine' is nothing but a creature of shallow understanding and is lapped up by adjudicators as it is couched in a catchy phrase appealing to common sense but it has no legal basis/support and is of no value for the purpose of interpretation of legal provisions relating to indirect( or direct) taxation.
In fairness I must add that the said judgement remains soundly reasoned to arrive at the right conclusion even if the reference to the ' stated doctrine' is ignored

M K Gupta 03/01/2017

 

Sir,

The Commerce Minister Ms. Nirmala Sitharman in a written reply in the Rajya Sabha on 6.8.2014 said,

"One of the guiding principles of FTP is that the taxes should not be exported. Therefore, exporters are granted access to duty free raw material or are provided refund of duties paid in manufacture of exported products."

Please also see DDT 2412 - 07.08.2014

Vijay Kumar

Vijay Kumar 03/01/2017