2015 (8) TMI 1363 - CGOVT - Central Excise

Rejection of rebate - Rule 18 of CER, 2002 - Ignorance of law - Held that - applicant had not exported the impugned goods on ARE-2 application as per the requirement of the Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004, although they are registered under the Central Excise Act, 1944. The procedures specified in Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and in Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 relating to removals, distribution and documents at the place of dispatch and place of export, acceptance of proof of export/filing of claim is also specified in the aforesaid notifications have also not been followed. Non-preparation of statutory document of ARE-2 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 rebate on the impugned 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. Thus, the applicant is not entitled for benefit of provisions of Notification No. 21/2004-N.T., dated 6-9-2004, as they have failed to comply with the conditions appended to the said notification - Decided against the assessee.

Issues Involved:
1. Rejection of rebate claim due to procedural non-compliance.
2. Time-barred portion of the rebate claim.
3. Acceptance of alternative proof of export in lieu of ARE-2 forms.

Detailed Analysis:

1. Rejection of Rebate Claim Due to Procedural Non-Compliance:
The applicant, engaged in the manufacture and export of Soyabean Meal Extraction (D.O. Cake), filed a rebate claim for Rs. 4,81,389/- for excise duty paid on Hexane used in the manufacture of exported Soyabean Meal under Rule 18 of the Central Excise Rules, 2002. The adjudicating authority rejected the claim as the applicant did not fulfill conditions prescribed under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004. Specifically, the applicant failed to use and submit the ARE-2 forms, which are essential documents for export under the said notification. Additionally, the applicant did not provide original shipping bills as an alternative proof of export.

The applicant argued that the non-submission of ARE-2 forms was a procedural lapse due to their belief that such forms were not required for exempted products. They provided other documents like export invoices, shipping bills, and sales tax Form 'H' as proof of export. However, the government held that the ARE-2 form is a mandatory statutory requirement and its absence cannot be considered a minor procedural lapse.

2. Time-Barred Portion of the Rebate Claim:
A portion of the rebate claim amounting to Rs. 17,901/- was rejected on the grounds of being time-barred. The applicant did not contest this part of the decision, and the government upheld the rejection of this portion of the claim.

3. Acceptance of Alternative Proof of Export in Lieu of ARE-2 Forms:
The applicant submitted various documents such as export invoices, shipping bills, and sales tax Form 'H' to substantiate their export claims. They cited multiple judicial precedents arguing that substantial benefits of rebate should not be denied due to procedural lapses if the fact of export is verifiable from other documents. However, the government emphasized that the submission of ARE-2 forms is a statutory requirement and not merely procedural. The absence of ARE-2 forms and original shipping bills meant that the necessary correlation between goods cleared from the factory and those exported could not be established.

The government referred to several judicial decisions, including the Supreme Court's ruling in Mihir Textiles Ltd. v. Collector of Customs, Bombay, which held that concessional relief dependent on certain conditions cannot be granted without compliance with those conditions. The government also noted that the applicant's reliance on C.B.E. & C. Circular No. 648/39/2002-C.E. was misplaced as it applies to unregistered units, whereas the applicant was a registered unit required to follow Rule 19 and related notifications.

Conclusion:
The government upheld the rejection of the rebate claim on the grounds of non-compliance with statutory requirements, specifically the failure to use and submit ARE-2 forms and original shipping bills. The portion of the claim that was time-barred was also upheld. The revision application was rejected, affirming the decisions of the adjudicating and appellate authorities.

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