Bombay High Court Quashes Order Denying Excise Rebate; Directs Fresh Review of Yamaha Motor’s Claim on Export Duty Refund

The Bombay High Court has set aside an order of the Central Government that denied a claim of major automobile manufacturer, Yamaha Motor for rebate on excise duties paid for exported goods. The division bench of Justice M.S. Sonak and Justice Advait M. Sethna passed the judgment while hearing a petition filed by a leading two-wheeler manufacturer, Yamaha Motor challenging the order of the Central Government’s Revision Authority. The order had rejected the company’s claim for a rebate of ₹3.26 crore, representing National Calamity Contingent Duty (NCCD) paid on exported motorcycles and scooters. The petitioner, Yamaha Motor engaged in manufacturing motorcycles and scooters at its Tamil Nadu facility, had paid excise duties including NCCD during March 2016 to June 2017. Following a change in the Cenvat Credit Rules in March 2016, the company inadvertently used basic excise duty credit to pay NCCD, which was no longer permissible under amended provisions. Upon realizing the lapse, the manufacturer voluntarily deposited ₹22.31 crore in cash under protest in 2018 and subsequently applied for a refund or rebate of the duty paid on exported goods under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-CE (NT). While rebates on basic excise duty were sanctioned, authorities rejected the NCCD component, reasoning that the company had utilized credit incorrectly and failed to pay interest on delayed NCCD payment. The rejection was upheld through multiple appellate stages, culminating in the challenged order issued by the Revision Authority in January 2022. The company argued that the rebate denial was unlawful as exports were zero-rated and the duty burden was ultimately revenue-neutral. The petitioner contended that no interest was payable on delayed NCCD during the relevant period since the enabling provision for such interest was introduced only in 2021 without retrospective effect. The rebate claim under Rule 18 could not be rejected by invoking transitional provisions of the CGST Act, 2017or the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, as the export rebate was independent of those proceedings. The company sought parity between exports made “under bond” (without duty payment) and “under claim of rebate” (with duty payment), both intended to ensure zero-duty export. The petitioner stressed that its claim was limited solely to the ₹3.26 crore rebate related to exported goods and not the entire ₹22.31 crore already adjudicated in other proceedings. The department argued that the rebate was correctly denied as the petitioner had paid duties under protest, indicating a continuing dispute. The petitioner had already settled related liabilities under SVLDRS 2019, and thus could not seek additional benefits. Interest on delayed NCCD was lawfully payable as the levy of NCCD and related interest provisions followed the Central Excise Act, 1944, which governed such duties. It was also alleged that the company sought double benefits, since its refund appeal before the CESTAT for the same period was dismissed in April 2025, where the tribunal found that the duty burden had been passed on to customers, invoking the principle of unjust enrichment. The bench noted that the Revision Authority failed to address several key issues, including the parity between exports under bond and exports under rebate. The nexus (or lack thereof) between non-payment of interest on NCCD and the rebate claim. The impact of settlement under SVLDRS and transitional provisions under GST. The rationale for disqualifying payments made “under protest.” The applicability of unjust enrichment principles to export rebates. The judges remarked that the order lacked reasoned findings and had not considered Rule 18 of the Central Excise Rules or the relevant notification in the proper context. “Statutory orders must stand or fall on the reasons recorded therein,” the bench observed, emphasizing that new justifications could not be added later through arguments or affidavits. Allowing the petition, the High Court set aside the order and remanded the matter to the Revision Authority for fresh adjudication. The authority has been directed to reconsider the rebate claim in accordance with law, address all legal and factual aspects raised by both sides, and pass a reasoned order within six months of receiving the court’s ruling. The court clarified that its observations were prima facie and should not influence the outcome of the reconsideration. Case Details Case Title: India Yamaha Motor P. Limited Versus UOI Case No.: Writ Petition No. 3587 Of 2022 Date: 10/11/2025 Counsel For Petitioner: V. Sridharan, Senior Advocate Counsel For Respondent: Karan Adik Click Here To Read Order Read More: Fake GST Invoicing | Punjab & Haryana High Court Grants Bail After 9 Months Of Custody

Bombay High Court Quashes Order Denying Excise Rebate; Directs Fresh Review of Yamaha Motor’s Claim on Export Duty Refund

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