The Bombay High Court ruled in favor of the petitioner, Parle Products Ltd., allowing their claim for a rebate of excise duty paid on exported biscuits. The court concluded that since the exported biscuits do not carry a retail sale price (RSP) as per the Standards of Weights and Measures Act, 1976, they are not exempt under Notification No. 3/2006. Therefore, the payment of excise duty on these exported goods was valid, and Parle was entitled to claim a rebate under Rule 18 of the Central Excise Rules, 2002.

1. Introduction (Para 1)

Parle Products Ltd. challenged a February 14, 2013 order under Article 226, wherein the Revisional Authority reversed an appellate decision that allowed Parle's rebate claim for excise duty paid on exported biscuits.

2. Petitioner's Claim (Paras 2-5)

Parle argued that exported biscuits do not bear a retail sale price, making the exemption under Notification No. 3/2006 inapplicable. Consequently, they paid excise duty on the export, which was denied as a rebate by the excise authorities, citing the exemption as applicable. The appellate authority had earlier ruled in Parle’s favor, stating that the goods exported do not meet the exemption criteria.

3. Revisional Authority's Stand (Para 5)

The Revisional Authority, however, reversed the appellate order, arguing that no duty should have been paid due to the exemption, and therefore no rebate could be claimed. They relied on previous decisions denying Cenvat credit on the inputs used for the exempted biscuits.

4. Petitioner’s Argument (Paras 7-8)

Parle, represented by counsel, argued that the exemption could not apply to exported goods as the RSP requirement cannot be met for exports. They also cited multiple precedents in similar cases where rebate was allowed despite the goods being exempt for domestic sale.

5. Respondents' Arguments (Para 9)

The respondents, led by the Union of India, argued that the exemption was unconditional, and as no duty was required, Parle could not claim a rebate. They cited Mahindra and Mahindra Ltd. vs. Commissioner to support their case.

6. Court’s Analysis (Paras 12-20)

The court analyzed the exemption notification and concluded that since the exported biscuits do not bear a retail sale price, they do not fall under the exempted category. The court also pointed to the lack of legal provisions that would allow the government to retain duty that was incorrectly paid.

7. Legal Precedents Cited (Paras 22-26)

The court relied on Ravi Foods Pvt. Ltd. and similar cases to establish that goods exported without RSP are not eligible for the domestic exemption, making the rebate of duty payable. The court rejected the reliance on Mahindra and Mahindra Ltd., noting that it was factually different.

8. Conclusion (Paras 30-31)

The court ruled in favor of Parle, quashing the Revisional Authority’s decision and granting the rebate claims.

Acts and Sections Discussed:

• Article 226 of the Constitution of India – Petition under this Article to quash and set aside orders.
• Section 35EE of the Central Excise Act, 1944 – Revisional powers of the Central Government.
• Section 4A of the Central Excise Act, 1944 – Assessment based on retail sale price.
• Rule 18 of the Central Excise Rules, 2002 – Rebate of duty on excisable goods and materials used in manufacturing exported goods.
• Notification No. 3/2006-CE – Exemption notification for biscuits below Rs. 100/kg retail price.

Ratio Decidendi:

The core issue was whether biscuits exported by Parle Products Ltd., which did not carry a retail sale price, were eligible for an exemption under Notification No. 3/2006. The court held that since the export goods did not meet the criteria for domestic sale exemption, the duty was rightfully paid, and Parle was entitled to claim a rebate under Rule 18 of the Central Excise Rules.

Subjects:

Excise Duty, Export Rebates, Central Excise Exemption

Parle Products, Export Rebate, Central Excise Act, High Court Judgment, Rule 18, Notification 3/2006, Article 226, RSP