2012 (7) TMI 875 - CGOVT - Central Excise

Denial of rebate claim - non-submission of certain documents - unjust enrichment - certain supplies were made only to contractor and Bill of Exports were not filed - Held that - Concept of unjust enrichment is not applicable in the matters of exports, as stands specified in the first proviso to sub-section (2) of Section 11(b) of Central Excise Act, 1944. - there are some differences in the stated factual details such as non-availabilities of relevant required documents and also details contained in submitted documents - Since the supplies are made to SEZ developer/Co-developer and contractors the Central Excise Invoices are issued on the name of buyers. It is observed that in case contactors, invoices were to be issued on the name both contactors and co-developers/developers as required under SEZ Rules. The rebate claim will be admissible if the duty paying document are valid and there is no discrepancy in such document. Case matter involves provisions of implementation of Special Economic Zone Act, 2005 and Special Economic Zone Rules, 2006 which has an overall overriding effect - excisable goods manufactured by the registered factory and cleared on payment of Central Excise Duty as per the invoices/ARE-1s/Bill of Export which clearly indicates the consignee s place as an SEZ. The goods are received in full in SEZ as per certification of Customs Officers recorded on the relevant ARE-1s/Shipping Bills/Bill of Exports. The receipt of said goods in SEZ is not disputed in these cases. - Since the verification of requisite documents as observed in foregoing para is required to be done by original authority to determine the admissible rebate claim amount, the case is required to be remanded back for fresh consideration. - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Unjust enrichment applicability.
2. Submission of necessary documents.
3. Compliance with SEZ Rules and Central Excise Rules.
4. Verification of invoices and rebate claims.
5. Procedural lapses and substantial benefit of rebate.

Detailed Analysis:

1. Unjust Enrichment Applicability:
The primary issue revolved around whether the concept of unjust enrichment applies to goods supplied to SEZ. The Commissioner (Appeals) held that such supplies are not "exports out of India," thus attracting unjust enrichment. However, the judgment clarified that as per Section 2(m) of the SEZ Act, 2005, supplying goods from the domestic tariff area (DTA) to an SEZ is considered an export. The Central Board of Excise and Customs (C.B.E. & C.) Circular No. 6/2010-Cus., dated 19-3-2010, confirmed that rebate under Rule 18 of the Central Excise Rules, 2002, is admissible for supplies made from DTA to SEZ. Therefore, the concept of unjust enrichment does not apply to such exports.

2. Submission of Necessary Documents:
The lower authorities rejected the rebate claims due to non-submission of certain documents and alleged deficiencies in the submitted documents. The applicant contended that they had provided the required documents, including ARE-1 Forms, invoices, and Bill of Exports, which were duly acknowledged by the Customs officers. The judgment emphasized that the applicant had submitted a no Cenvat credit availment certificate, which should suffice in place of a disclaimer certificate, as per para 8.3 of Chapter 8 of C.B.E. & C.'s Manual on Supplementary Instructions.

3. Compliance with SEZ Rules and Central Excise Rules:
The judgment highlighted that the case involves the implementation of the SEZ Act, 2005, and SEZ Rules, 2006, which have an overriding effect. The relevant circulars and rules stipulate that the procedure for claiming rebates for supplies to SEZ should be the same as for exports under Rule 18 or Rule 19 of the Central Excise Rules, 2002. The judgment stressed the importance of adhering to the statutory provisions and ensuring that the supplies to SEZ developers/co-developers and contractors are properly documented and verified.

4. Verification of Invoices and Rebate Claims:
The judgment noted discrepancies in the factual details regarding the invoices and the submission of required documents. It directed the original authorities to verify the documents, including invoices, ARE-1s, and Bill of Exports, to ensure that the supplies were made to authorized SEZ developers/co-developers and contractors. The judgment emphasized that the rebate claims should be sanctioned after due verification of the documents and ensuring compliance with the relevant rules and regulations.

5. Procedural Lapses and Substantial Benefit of Rebate:
The judgment acknowledged that substantial benefits of rebate should not be denied due to procedural lapses. It cited several judgments that support the view that procedural lapses should not result in the denial of substantial benefits. The judgment remanded the case back to the original authority for fresh consideration and directed them to complete the verification process in a time-bound manner, providing a reasonable opportunity of hearing to the applicant.

Conclusion:
The judgment set aside the impugned orders and remanded the case to the original authority for sanctioning the claimed rebates after due verification of the documents. It emphasized the importance of adhering to the statutory provisions and ensuring that the supplies to SEZ developers/co-developers and contractors are properly documented and verified. The judgment also highlighted that the concept of unjust enrichment does not apply to exports to SEZ, and substantial benefits of rebate should not be denied due to procedural lapses.