2011 (9) TMI 922 - CGOVT - Central Excise

Issues Involved:
1. Compliance with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004.
2. Submission of triplicate copies of ARE-1.
3. Double benefit under DFIA scheme.
4. Procedural infractions versus substantive compliance.
5. Rebate claims under Rule 18 of the Central Excise Rules, 2002.

Detailed Analysis:

1. Compliance with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004:
The Respondent-department argued that the manufacturer-exporter violated Rule 3(a)(i) & (ii) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 by failing to remove goods either under sealing by a Central Excise Officer or under self-sealing/self-certification. The Commissioner (Appeals) supported this view, stating that the applicant did not follow the prescribed procedures.

2. Submission of triplicate copies of ARE-1:
The Respondent-department contended that the applicant failed to submit triplicate copies of ARE-1 to the jurisdictional Central Excise Officer, violating para 3(b)(ii) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. The Commissioner (Appeals) upheld this, noting the failure to produce all four copies of ARE-1 within the stipulated time. However, the Government observed that the original authority verified the jurisdictional Central Excise Superintendent's records, which confirmed that the duty was paid, and the department did not dispute the export of duty-paid goods.

3. Double benefit under DFIA scheme:
The Commissioner (Appeals) held that the applicant failed to produce substantial documentary evidence to prove that they did not avail double benefits under the DFIA scheme, as per Board's Circular No. 11/2009-Cus., dated 25-2-2009. However, the Government noted that Notification No. 40/2006-Cus., dated 1-5-2006, as amended by Notification No. 17/2009-Cus., dated 19-2-2009, and further clarified by the Finance (No. 2) Act, 2009, allowed the facility of rebate for locally procured materials used in the manufacture of goods exported under the DFIA scheme. The department did not provide evidence of any double benefit availed by the applicant.

4. Procedural infractions versus substantive compliance:
The applicant argued that procedural infractions should be condoned if the substantive conditions for rebate were met, citing several judicial precedents. The Government agreed, noting that the substantial requirement under Rule 18 of the Central Excise Rules, 2002, was the manufacture and export of duty-paid goods. The Government emphasized that procedural deviations could be condoned if the core requirements were met, as supported by various judicial rulings, including those by the Supreme Court.

5. Rebate claims under Rule 18 of the Central Excise Rules, 2002:
The applicant contended that they complied with the substantial requirements of Rule 18, which mandates that goods be manufactured and exported on payment of appropriate duties, and that the rebate claim be filed within one year from the date of export. The Government found that the applicant met these requirements and that the denial of rebate claims was not justified. The Government set aside the Order-in-Appeal and allowed the revision applications, affirming that the rebate claims were admissible under Rule 18 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004.

Conclusion:
The Government concluded that the applicant's rebate claims were admissible, setting aside the Commissioner (Appeals)'s order and allowing the revision applications. The Government emphasized that procedural infractions should not deny substantive benefits if the core requirements of manufacture and export of duty-paid goods were met.

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