9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 1329 - CGOVT - Central ExciseCompliance of Rule 19 of CER, 2002 and N/N. 42/2001-C.E. (N.T.), dated 26-6-2001 - recovery u/S 11A - export clearance without payment of duty and also non-compliance of conditions of notification - Export against H-Form , - execution of bond but neither ARE-1 nor proof of export was filed as stipulated under the Rules - Held that - Government observes that any export clearance, intended to be made without payment of duty, will be subject to Rule 19 ibid read with Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 in case of registered units and C.B.E. & C. s Circular No. 648/39/2002, dated 25-7-2007 in case of declarant units. ARE-1 is the principal document under Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 that establishes that the applicant has either followed the procedure for sealing of goods and examination of goods at place of dispatch either by Central Excise Officer or by self-sealing. In the absence of the ARE-1 and without following the procedure described above, it cannot be established that goods which were cleared from factory were the ones actually exported or that goods exported cannot be correlated with goods cleared from the factory. If the ARE-1 is not produced, it cannot also be established that the goods are the same on which duty is debited in the bond account, i.e., the duty paid character of the goods also cannot be established. The submission of application for removal of export goods in ARE-1 form is must because such leniencies lead to possible fraud of claim an alternatively available benefit which may lead to additional/double benefits. The Hon ble High Court of Allahabad in the case of M/s. Vee Excel Drugs and Pharmaceuticals Pvt. Ltd. v. Union of India 2014 (1) TMI 1340 - ALLAHABAD HIGH COURT has dealt with the issue of permissibility of availment of export benefit when ARE-1 not filed. It has held that ARE-1 application is the basic essential document for export. Filing of ARE-1 having been specifically contemplated under notification issued under Rule 18 ibid, same was mandatory and not directory. Therefore, lapse in filing of ARE-1 was held as non-condonable. The ratio of this decision is squarely applicable to clearances made for export without payment of duty under Rule 19 ibid - when the applicant seeks rebate under Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001, which prescribes compliance of certain conditions, the same cannot be ignored. While claiming the rebate under Rule 19 ibid, the applicant should have ensured strict compliance of the conditions attached to the Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001. Government holds that non-preparation of statutory document of ARE-1 and not following the basic procedure of export as discussed above, cannot be treated as just a minor or technical procedural lapse for the purpose of availing the benefit of duty free clearances of the impugned export goods. As such there is no force in the plea of the applicant that this lapse should be considered as a procedural lapse of technical nature which is condonable in terms of case laws cited by applicant. Circular dated 25-7-2002 has been issued with reference to Part-III of Chapter 7 of C.B.E. & C. s Excise Manual of Supplementary Instructions, which relates to units which are not registered with the Central Excise whereas the applicant was at the relevant time registered with the department and they were required to observe the provisions of Rule 19 of Central Excise Rules, 2002 read with Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 and follow the procedure prescribed therein. As such it was always the intention of the applicant to be a registered unit otherwise they would have followed the declarant unit procedure as stated in para 9.1.6 above. There is nothing on record to show that due procedure for declarant units has been followed by them. As such, H-Form is not a valid document as proof of export in the case of the applicant and their contention in this regard is not tenable. Ignorance of law is no excuse not to follow something which is required to be done by the law in a particular manner. Revision application rejected - decided against assessee.
Issues Involved:
1. Non-compliance with Export Procedure under Rule 19 of Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001. 2. Validity of Form-H as Proof of Export. 3. Imposition of Penalty under Rule 25 of Central Excise Rules, 2002. 4. Procedural Lapse and Ignorance of Law. Detailed Analysis: 1. Non-compliance with Export Procedure under Rule 19 of Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 The applicant, a registered manufacturing unit, cleared excisable goods for export but did not follow the prescribed export procedure. The applicant failed to submit the ARE-1 form and proof of export, which are mandatory under Rule 19 of the Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001. The government emphasized that ARE-1 is essential for verifying the identity and duty-paid status of goods meant for export. Non-compliance with these statutory requirements led to the goods being considered as cleared without payment of duty, making the duty recoverable under Section 11A of the Central Excise Act, 1944. 2. Validity of Form-H as Proof of Export The applicant argued that Form-H should be accepted as proof of export. However, the government noted that Form-H is not a valid document for registered units under the Central Excise Rules. The applicant was expected to follow the procedure for registered units, which includes submitting ARE-1 and other specified documents. The government dismissed the applicant's reliance on Circular No. 648/39/2002-C.E. and supplementary instructions, stating that these apply to units not registered with Central Excise, which was not the case for the applicant. 3. Imposition of Penalty under Rule 25 of Central Excise Rules, 2002 The applicant contested the penalty on the grounds that the specific sub-clause of Rule 25 was not mentioned in the show cause notice. The government held that the nature of the contravention was clearly set out in the notice and upheld in the impugned order. The absence of the specific sub-clause did not prejudice the applicant, as the charges were clear. The penalty imposed was deemed reasonable and justified, aligning with the rulings of the Hon'ble Punjab & Haryana High Court in the case of CC, Amritsar v. ATM International. 4. Procedural Lapse and Ignorance of Law The applicant claimed that the failure to follow the proper procedure was due to ignorance of the law. The government rejected this explanation, emphasizing that ignorance of the law is no excuse. The statutory requirements are mandatory and non-compliance cannot be condoned as a mere procedural lapse. The government cited several judgments, including the Hon'ble Supreme Court's decision in the case of Mihir Textiles Ltd. v. Collector of Customs, Bombay, to support the view that compliance with conditions for concessional duty relief is mandatory. Conclusion The government found no merit in the applicant's revision application. The demand for duty along with interest and the imposition of penalty were upheld. The applicant's arguments regarding procedural lapses and ignorance of law were dismissed. The order of the Commissioner (Appeals) was affirmed, and the revision application was rejected.
|
