2013 (10) TMI 1310 - CGOVT - Central Excise

Denial of Rebate claim - Respondents have not furnished the Bill of Exports against all the copies of the said ARE-1s - SEZ Unit - Held that - Export duty is leviable under Section 12 of Customs Act and definition of export as given in Section 2(18) is relevant for charging export duty. Hon ble High Court has further held that for charging duty under Section 12 definition of export as given in SEZ Act cannot be incorporated. In the instant case the issue export benefit like rebate/drawback cannot be equated with the issue of charging export duty. As per Section 5 of SEZ Act 2005 the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Rule 30(1) of SEZ Rules 2006 stipulates that DTA supplier shall clear the goods to SEZ Unit or Developer as in the case of exports either under bond or as duty paid goods under claim of rebate on the cover of ARE-1 referred to in Notification No. 42/2001-C.E. (N.T.) dated 26-6-2001. The said notification is now replaced by new Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004. Similarly drawback benefit and other export entitlements are also made admissible to SEZ suppliers. So the C.B.E. & C. Circular issued in the light of provisions of SEZ Act/Rules cannot be called illegal as contended by department. Commissioner (Appeals) has categorically recorded in his findings that said goods were received in the SEZ Unit and therefore receipt of duty paid goods in SEZ Unit is not in dispute. The non-preparation of bill of export is a procedural lapse for which substantial benefit of rebate cannot be denied - rebate claim of duty paid on goods cleared to SEZ is rightly held admissible by Commissioner (Appeals) under Rule 18 of Central Excise Rules 2002 read with Notification No. l9/2004-C.E. (N.T.) dated 6-9-2004. Government finds no infirmity with said order-in-appeal and therefore upholds the same. - Decided against revenue.

Summary

Issues Involved:
1. Definition and applicability of the term "export" under the Central Excise Act and Customs Act.
2. Admissibility of rebate claims for goods supplied to SEZ units.
3. Procedural requirements for claiming rebate, specifically the submission of Bill of Exports.
4. Timeliness and jurisdiction of the revision application filed by the department.

Issue-Wise Detailed Analysis:

1. Definition and Applicability of the Term "Export":
The department argued that the term "export" should be interpreted as a physical export out of the country, as defined under the Customs Act, 1962. They cited the case of M/s. Essar Steel Ltd. v. UOI, where it was held that the definition of "export" in the Customs Act cannot be displaced by definitions in other statutes. However, the government noted that the Central Board of Excise and Customs (C.B.E. & C.) Circular No. 29/2006-Cus. clarified that supplies from Domestic Tariff Area (DTA) to SEZ are eligible for rebate under Rule 18 of the Central Excise Rules, 2002, subject to certain conditions. The term "export" in this context includes supplies to SEZs, as per the SEZ Act, 2005.

2. Admissibility of Rebate Claims for Goods Supplied to SEZ Units:
The Commissioner (Appeals) had allowed the rebate claims, stating that supplies to SEZs qualify for rebate under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.). The government upheld this view, noting that the C.B.E. & C. Circular No. 6/2010-Cus. reiterated that rebate is admissible for supplies made from DTA to SEZ. The judgment of the Hon'ble CESTAT in the case of M/s. Tiger Steel Engineering Pvt. Ltd. was distinguished as it dealt with refund of accumulated Cenvat credit and not rebate claims.

3. Procedural Requirements for Claiming Rebate:
The department contended that the absence of a Bill of Export rendered the rebate claims incomplete. However, the government observed that the goods were indeed received in the SEZ unit, and the non-preparation of the Bill of Export was a procedural lapse. The Commissioner (Appeals) had cited several judgments supporting the view that substantial benefits should not be denied due to procedural lapses. Therefore, the government held that the rebate claims were rightly admissible.

4. Timeliness and Jurisdiction of the Revision Application:
The department initially filed an appeal before the CESTAT, which was rejected as non-maintainable. They then filed a revision application under Section 35EE of the Central Excise Act, 1944. The government noted that the time spent pursuing the appeal before the wrong forum should be excluded under Section 14 of the Limitation Act, 1963. Consequently, the revision application was considered timely. The government also referenced judgments from various High Courts that supported the exclusion of time spent in bona fide pursuit of appeals before the wrong forum.

Conclusion:
The government upheld the Commissioner (Appeals) order, confirming that rebate claims for goods supplied to SEZ are admissible under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.). The procedural lapse of not submitting the Bill of Export was not sufficient to deny the rebate claims. The revision application filed by the department was rejected, and the order-in-appeal was upheld.