2013 (7) TMI 876 - CGOVT - Central Excise

Denial of rebate claim - goods were not exported direct from factory or warehouse as laid down in condition 2(a) of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and the relaxed procedure laid down in C.B.E. & C. Circular No. 294/10/97-CX, dated 30-1-1997 - Held that - Applicants cleared the goods from factory to their godown at Bhiwandi, which was admittedly not a registered warehouse. However, the above said Circular dated 30-1-1997 provides for permits the export of goods from a place other than factory or registered warehouse subject to compliance of procedure laid down therein. Hence, rebate claims cannot be rejected merely on the grounds that the goods have not been exported directly from the factory or warehouse. The whole case is required to be seen in context of compliance of the said Circular dated 30-1-1997. The department has not brought out any violation of Circular dated 30-1-1997 by the applicant. Moreover, the applicant kept the department informed that they are routing their goods through Bhiwandi godown. The applicant got their goods stuffed in presence of excise authority. As such, the applicant cannot be alleged to have violated the provisions contained in the above said circular. Central Excise Officers have made verification as required under C.B.E. & C. Circular dated 30-1-1997. The certification by Central Excise Officers in ARE-1 is certainly required to be done after verifying that goods are in original packing. The Central Excise Officers have nowhere pointed out that goods were not in original packing. So the contention of department regarding correlability is not sustainable. The cross reference of ARE-1s and Shipping Bills is available on ARE-1s and shipping bills. The ARE-1s duly certified by Central Excise Officers and Customs Officers leave no doubt that duty paid goods cleared from factory have been exported as there is no reason to doubt the endorsement of Customs Officers on the ARE-1 Form. Substantial compliance of provisions of said Circular dated 30-1-1997 has been done by the applicant - Government also notes that although there are a catena of judgments that the substantial exports benefits should not be denied on mere procedural infractions until and unless there is some evidence to point out major violation to defraud the Government revenue.- rebate claims are admissible to the applicants. - Decided in favour of assessee.

Summary

Issues Involved:
1. Compliance with Notification No. 19/2004-C.E. (N.T.) and Circular No. 294/10/97-CX.
2. Direct export from factory or warehouse.
3. Verification and correlation of goods for rebate claims.

Issue-wise Detailed Analysis:

1. Compliance with Notification No. 19/2004-C.E. (N.T.) and Circular No. 294/10/97-CX:
The core issue revolves around whether the rebate claims comply with Notification No. 19/2004-C.E. (N.T.) and Circular No. 294/10/97-CX. The applicants argued that they adhered to the procedure prescribed in the Circular dated 30-1-1997, which permits the export of goods from a place other than the factory or warehouse. The Government observed that the admissibility of rebate claims mainly depends on compliance with the provisions and procedures outlined in the Circular. The Circular allows for the export of duty-paid excisable goods stored outside the place of manufacture, provided certain conditions are met, including the verification of goods by Central Excise Officers.

2. Direct export from factory or warehouse:
The department contended that the goods were not exported directly from the factory or warehouse, violating condition 2(a) of Notification No. 19/2004-C.E. (N.T.). However, the Government noted that the Circular dated 30-1-1997 permits exports from places other than the factory or warehouse, subject to compliance with specified procedures. The applicants had informed the department about routing their goods through the Bhiwandi godown and had the goods stuffed in the presence of excise authorities. The Government concluded that the rebate claims could not be rejected merely because the goods were not exported directly from the factory or warehouse.

3. Verification and correlation of goods for rebate claims:
The department argued that the Assistant Commissioner sanctioned the rebate claims without verifying the correlation between the goods cleared from the factory and those exported. The applicants contended that the Assistant Commissioner had verified the quantities and descriptions of the exported goods with the shipping documents and found them to tally. The Government observed that the Central Excise Officers had endorsed the ARE-1 forms after verifying the identity and duty-paid character of the goods. The Government found no force in the department's contention that the verification was not conducted as required. The endorsement by Central Excise Officers and Customs Officers on the ARE-1 forms indicated that the duty-paid goods cleared from the factory were indeed exported.

Conclusion:
The Government concluded that the applicants had substantially complied with the provisions of the Circular dated 30-1-1997 and that the rebate claims were admissible. The Government set aside the impugned Orders-in-Appeal and restored the impugned Orders-in-Original, thereby allowing the revision applications.