2013 (5) TMI 795 - CGOVT - Central Excise

Denial of rebate claim - Respondents had neither exported the goods within the period of six months from the date of clearance from the factory premises nor have produced any permission from the competent authority for extension of such time limit - Held that - Goods are to be exported within 6 months from the date on which they are cleared for export from factory. The Commissioner has discretionary power to give extension of this period in deserving and genuine cases. In this case in fact such extension was not sought. It is obvious that the applicants have neither exported the goods within prescribed time nor have produced any extension of time limit permitted by competent authority. The said condition is a statutory and mandatory condition which has to be complied with. It cannot be treated as an only procedural requirement. - rebate claim is not admissible to the respondents for failure to comply the mandatory condition of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. The respondents have categorically admitted that goods were exported after six months time. - Decided in favour of Revenue.

Summary

Issues:
Admissibility of rebate claim under Rule 18 of Central Excise Rules, 2002 for goods exported after the expiry of six months from the date of clearance without obtaining permission from competent authority.

Analysis:
The revision application was filed against the Order-in-Appeal No. 17/CE/Appeal/CHD-I/2011, which set aside the Order-in-Original rejecting a rebate claim of Rs. 3,54,338 filed by the respondents for goods exported after the expiry of six months. The respondents, a registered manufacturer of bulk drugs, exported goods after clearance from the factory but beyond the stipulated six-month period without seeking extension. The Commissioner of Central Excise observed non-compliance with the conditions under Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, and issued a show cause notice leading to the rejection of the rebate claim.

The respondents appealed the Order-in-Original, and the Commissioner (Appeals) allowed the appeal, emphasizing that the substantive right of the respondents should not be denied for not applying for an extension when the goods had already been exported. The Central Government, upon review, noted that the mandatory condition of exporting goods within six months from clearance was not met, and no extension was sought. The Government highlighted that the condition under Notification No. 19/2004-C.E. (N.T.) is statutory and mandatory, emphasizing compliance. The respondents' argument of providing a credit period to the buyer was deemed untenable for rebate eligibility under the said notification.

Given the non-compliance with the mandatory condition, the Government set aside the Order-in-Appeal and reinstated the initial Order-in-Original, rejecting the rebate claim. The decision was based on the clear violation of the statutory provision, emphasizing the importance of adhering to prescribed timelines and conditions for rebate claims. The revision application succeeded based on the above analysis, leading to the restoration of the original order.