Duty Drawback not admitted as Cenvat Credit has been availed

This query is : Resolved

Parivesh Goel (Querist)
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01 March 2011 Dear Sir,

We are manufacturing & exporting Brass Strips in Coils under Drawback Schedule Heading 7409-B i.e Drawback when cenvat facility has been availed. We are preparing ARE-1 under N.T. 19/2004 of CE dt. 06/09/04 (as amended), issued under Rule 18 of CE (No.2) Rules, 2001. We are also claiming Cenvat Credit on the finished goods and debiting the duty on the same day. But, our case is being rejected by Customs saying that both benefits can't be availed as stated under 8(e) of N.T. No. 103/08 dt. 29.08.08.

We feel that the same is incorrect. Kindly, clarify.

Regards,

Parivesh Goel

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Surrender (Expert)
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02 March 2011 ARE-1 procedure could save debiting of Duty if exported under Bond or LUT;
You seem to be aviling CENVAT credit on inputs for manufacturing exportable finished goods (you could not be availing CENVAT credit on finished goods);
If you are not exporting under Bond / LUT, you stand to get Drawback of Duty debited on finished goods !