2013 (7) TMI 75 - CGOVT - Central Excise

Procedural infraction in export of goods - failure to incorporate self-certification on ARE-2 as prescribed in para (iii) of the Notification No. 42/2001-C.E. (N.T.) r/w para (5) of the Notification No. 21/2004-C.E. (N.T.) - Held that - Substantial benefit of rebate of duty paid on inputs cannot be denied for such technical procedural infractions. There is catena of judgment wherein it has been held that export related incentives cannot be declined for the minor procedural lapses. However, the respondent cannot be allowed to violate the procedural requirements repeatedly. If the respondent is found to commit such lapses again, department may take action in accordance with law. - Decided in favour of Assessee.

Summary

Issues:
Appeal against rejection of rebate claim under Central Excise Rules.

Analysis:
The revision applications were filed by the Commissioner of Central Excise against the Orders-in-Appeal passed by the Commissioner of Central Excise (Appeals) with respect to Orders-in Original passed by Deputy Commissioner of Central Excise. The respondent, a pharmaceutical company, had filed an input rebate claim for duty paid on inputs used in the manufacture of export goods. The claim was rejected due to the failure to fulfill certain conditions of the notifications.

The main issue revolved around the fulfillment of conditions under Notification No. 21/2004-C.E. (N.T.) and Notification No. 42/2001-C.E. (N.T.). The department contended that the respondent had not obtained permission for manufacturing or processing and export of goods as required by the notifications. Additionally, the party failed to incorporate self-certification in the ARE-1 as prescribed in the notifications. The Commissioner (Appeals) had decided in favor of the respondent, leading to the revision applications.

The Government carefully reviewed the case records and observed that the respondent had indeed exported goods and filed a rebate claim for duty paid on inputs. While the original authority rejected the claim citing procedural lapses, the Commissioner (Appeals) upheld the claim. The Government noted that the procedural requirements, such as obtaining permission prior to export and self-certification, were important but should not result in denying substantial benefits like rebate of duty paid on inputs.

Ultimately, the Government upheld the orders of the Commissioner (Appeals) and rejected the revision applications for lacking merit. It was emphasized that while the rebate claim was allowed in this instance, repeated procedural lapses by the respondent could lead to legal action by the department in the future to ensure compliance with the regulations.

In conclusion, the judgment affirmed the decision in favor of the respondent, highlighting the importance of procedural compliance while also acknowledging the significance of not denying export-related incentives for minor procedural infractions.