2011 (6) TMI 932 - HC - Central Excise

Summary

Issues Involved:
1. Compliance with the conditions for rebate claims under the Central Excise Act, 1944.
2. Verification and endorsement of ARE-1 forms by the Superintendent having jurisdiction over the factory.
3. Identification and co-relation of goods exported with the goods cleared from the factory.
4. Procedural lapses and their impact on the rebate claims.

Detailed Analysis:

1. Compliance with the Conditions for Rebate Claims:
The petitioner, a partnership firm, exported pan masala and filed nineteen claims of rebate with the Maritime authority. The Deputy Commissioner of Central Excise, Jamnagar, rejected these claims on the grounds that the ARE-1 forms were not endorsed by the Superintendent having jurisdiction over the factory of the manufacturer. The petitioner appealed, and the Commissioner (Appeals), Rajkot allowed the appeal, stating that substantive compliance regarding the export of goods had been fulfilled and that non-endorsement was not a substantive condition for allowing the rebate claim.

2. Verification and Endorsement of ARE-1 Forms:
The Department filed a revision application arguing that endorsement by the Superintendent was essential. The revisional authority allowed the revision application, stating that there were no distinguishing marks or numbers on the cartons to establish that the same goods had been exported. The petitioner contended that the goods were in original packing and identifiable as duty-paid, and that the Superintendent's refusal to endorse the ARE-1 forms was unreasonable.

3. Identification and Co-relation of Goods:
The petitioner argued that there was no legal requirement for the goods or invoices to carry serial numbers or specific markings. The goods were exported in original packing, and the invoices were original and tallied with the duty-paid records of the manufacturers. The revisional authority, however, held that the absence of distinguishing marks made it impossible to co-relate the goods exported with those cleared from the factory, thus failing to fulfill the conditions of the relevant circular.

4. Procedural Lapses and Their Impact:
The Commissioner (Appeals) found that the petitioner had followed all the requirements except for the endorsement on the triplicate and quadruplicate copies of ARE-1 by the Superintendent. The revisional authority, however, considered the lack of endorsement a substantive requirement. The High Court observed that the verification of the identity of the goods and their duty-paid character should be done prior to export, and that the Superintendent having jurisdiction over the factory was only required to verify the duty payment, not the co-relation of goods.

Conclusion:
The High Court quashed the order of the revisional authority, stating that the Superintendent having jurisdiction over the factory was not required to co-relate the goods exported with those cleared from the factory. The Court restored the order of the Commissioner (Appeals), which had allowed the rebate claims based on the verification report of invoices and duty-paid particulars. The petition was allowed, and the rule was made absolute with no order as to costs.