2012 (11) TMI 1067 - CGOVT - Central Excise

Denial of rebate claim - rebate claim was preferred by them on the strength of ARE-1 s instead of ARE-2 which is the prescribed document as per provisions contained in Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and the amount of rebate claim in the said ARE-1 s was shown as NIL - Held that - exporter has followed all the conditions and procedure laid down under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 except the above said violation of exporting goods on ARE-1 form instead of ARE-2 Form. Department has also pleaded that batch production records does not contain the vital information, such as name of supplier of inputs, input invoice, etc., and as such production records are not co-relatable to the exports in question. Government observes that as per the conditions of said notification, the manufacturer or processor shall obtain the materials to be utilized in the manufacture of finished goods intended for export, directly from the registered factory in which such goods are produced accompanied by an invoice under Rule 11 of Central Excise Rules, 2002. Exporter claimed to have complied with the said requirement. Department has not countered the said claim of respondent. So, it cannot be said that use of duty paid inputs in the manufacture of export goods is not established - respondents are rightly held eligible for input stage rebate under Notification No. 21/2004-C.E. (N.T.) r/w Rule 18 of Central Excise Rules, 2002. - Decided against Revenue.

Issues:
1. Rebate claim under Central Excise Rules, 2002.
2. Export procedure compliance with Notification No. 21/2004-C.E. (N.T.).
3. Export on ARE-1 form instead of ARE-2 form.
4. Substantiation of duty paid on inputs for export goods.
5. Compliance with procedural requirements for rebate claim.

Analysis:
The case involves a dispute regarding a rebate claim under the Central Excise Rules, 2002. The respondent, engaged in manufacturing drugs and medicines, filed a rebate claim for duty paid on inputs used in the manufacture of export goods. The issue arose when the rebate claim was rejected due to the use of ARE-1 forms instead of the prescribed ARE-2 form as per Notification No. 21/2004-C.E. (N.T.). The original authority rejected the claim based on this discrepancy, leading to an appeal by the respondent.

The Commissioner (Appeals) favored the respondent, prompting a revision application by the department before the Central Government. The department argued that the respondent failed to export goods in the prescribed ARE-2 form, which necessitates providing details of duty paid on inputs used in the export goods. Additionally, the department highlighted that the Batch Production Records submitted by the respondent lacked essential information required for substantiating the duty paid on inputs.

During the hearing, the respondent's representatives defended the Order-in-Appeal, asserting its legality and correctness. Upon reviewing the case records and orders, the Government noted that the respondent had complied with most conditions under Notification No. 21/2004-C.E. (N.T.) except for the use of ARE-1 instead of ARE-2 for exports. The Government acknowledged that the respondent had procured inputs from registered factories with proper documentation, and the use of duty-paid inputs in export goods was established.

Citing previous court judgments, the Government emphasized that procedural infractions should not negate the benefits of export-related schemes if substantial conditions are met. In this case, despite the procedural error of exporting on ARE-1 instead of ARE-2, the substantial conditions of the notification were fulfilled. Consequently, the Government agreed with the Commissioner (Appeals) and upheld the eligibility of the respondent for input stage rebate under the relevant rules.

Ultimately, the revision application was rejected for lacking merit, and the order of the Commissioner (Appeals) was upheld by the Central Government.

← Previous Next →