2015 (6) TMI 1015 - AT - Central Excise

Denial of refund claim - Held that - In this case, out of 70 export consignments cleared for export during July September 2007 period, in 11 consignments, the vessel in which the goods had been loaded sailed in October 2007. In other cases the vessel carrying the export goods left during July 2007 September 2007 period. Since the refund claim has been filed on 5/5/08, the same, in respect of all these export consignments, is within the prescribed limitation period, and, in fact, this is not the allegation of the Department. There is no allegation that the condition 2,4,5 or 6 are not satisfied. Since as per the provisions of the notification, the refund of unutilised Cenvat credit is admissible in respect of inputs or input services used in manufacture of final products, which are cleared for export under bond or letter of undertaking , prima facie, of the view that when refund claim has been filed in respect of the 70 consignments cleared for export during July 2007 September 2007, within the prescribed limitation period, and by the time the refund claim was filed, the goods had already been exported out of India, refund in respect of 11 consignments cannot be denied just because the same were physically exported in October 2007. Another ground for denial of refund is that the copies of shipping bills duly certified by the customs officers regarding export of the goods were not enclosed alongwith the refund application. While it is true that alongwith the refund application, only self certified copies of shipping bills were enclosed, but as mentioned in the impugned order-in-appeal, the customs certified copies were produced subsequently. I am prima facie of the view that non-production of customs certified copies of shipping bills alongwith the refund application is only a remediable defect for which the refund claim cannot be denied when subsequently the customs certified copies of shipping bills were produced. A substantive claim cannot be denied for a minor procedural violation. There is merit in the appellant s plea that the refund order has been correctly sanctioned by the Asst. Commissioner.

Summary

Issues Involved:

1. Admissibility of refund claim for the period July 2007 to September 2007.
2. Requirement of submitting customs-certified shipping bills with the refund claim.
3. Interpretation of the date of export for refund purposes.

Issue-wise Detailed Analysis:

1. Admissibility of Refund Claim for the Period July 2007 to September 2007:

The appellant, a manufacturer and exporter of yarn, applied for a cash refund of unutilized Cenvat credit amounting to Rs. 39,87,276/- for the period July 2007 to September 2007. The Assistant Commissioner sanctioned this refund. However, the Department appealed, and the CCE (Appeals) set aside the refund on the grounds that some exports occurred after September 2007, making the refund inadmissible for the said quarter. The appellant argued that the relevant date of export is the date of the "let export" order, as per the Hon'ble Supreme Court's judgment in Union of India vs. Asian Food Industries and Notification No. 41/07-ST dated 6/10/07. The Tribunal found merit in the appellant's argument, noting that the refund claim was filed within the prescribed limitation period and that the goods had been cleared for export under bond during the relevant quarter. Thus, the refund should not be denied merely because some shipments left in October 2007.

2. Requirement of Submitting Customs-Certified Shipping Bills with the Refund Claim:

The CCE (Appeals) also rejected the refund claim because the appellant did not submit customs-certified shipping bills with the refund application. The appellant contended that self-certified copies were initially submitted due to delays in receiving customs-certified copies, which were later provided. The Tribunal agreed with the appellant, stating that non-production of customs-certified copies at the time of the refund application is a remediable defect. The Tribunal emphasized that a substantive claim should not be denied for a minor procedural violation, especially when the required documents were eventually submitted.

3. Interpretation of the Date of Export for Refund Purposes:

The Department argued that the date of export is the date on which the ship carrying the goods leaves India, as per Explanation B to Section 11B of the Central Excise Act, 1944. The appellant countered this by citing the "let export" order date as the relevant date. The Tribunal clarified that the refund claim under Rule 5 of the Cenvat Credit Rules, 2004, is linked to the clearance of goods for export under bond, not the date the ship leaves India. The Tribunal found that the refund claim was filed within the limitation period and that the goods had been exported by the time of the claim, making the refund admissible.

Conclusion:

The Tribunal concluded that the Assistant Commissioner correctly sanctioned the refund. The CCE (Appeals) erred in rejecting the refund claim based on procedural grounds and an incorrect interpretation of the export date. The Tribunal set aside the impugned order, allowing the appeal with consequential relief, emphasizing that substantive claims should not be denied for minor procedural lapses.

(Dictated and pronounced in the open court)