2013 (7) TMI 332 - CGOVT - Central Excise

Rebate under Rule 18 of Central Excise Act Procedural infraction do not prohibit the Assessee from the benefit of rebate - Goods had not been directly exported from a factory or warehouse. The warehouse from which the goods had been exported was a dealer s godown in which duty paid goods were being stored and it was not a warehouse approved under Rule 20 of Central Excise Rules, 2002 As per Adjudicating Authority, the identity/correlation of the goods originally cleared from the manufacturing unit with goods cleared from the godown could not be established - The Jurisdictional Superintendent has not supervised/verified the goods Held that - Identification marks and Batch numbers on the packages are not the only means to identify the goods. It could be done from other means also - The goods, involved was Acetic Anhydride, which is a Controlled substance under Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 1993, sealing of inlet and outlet of the tankers with tamper proof seal and the description of the said seals has to be entered in the consignment note in Form 3 - A quarterly report has to be submitted to the Zonal Director of Narcotics Control Bureau, when controlled substances are transported from the jurisdiction of one Zonal Director. The controlled substances can be sold to a buyer after establishing his identity and declaration of purpose, for which it is being purchased. Clause 6 lays down the method of labelling of controlled substance for export. The export also requires a No Objection Certificate from Central Bureau of Narcotics of Government of India - Applicants had submitted copies of the consignment notes, intimation/returns to Narcotics Control Bureau and Central Bureau of Narcotics - Procedural infractions could not have deprived the applicants of the substantial right of rebate, particularly so when they had kept the Central Excise and NCB department informed at every stage. As per Hon ble Supreme Court in the case of UOI v. Suksha International 1989 (1) TMI 3 - SUPREME COURT OF INDIA has held that an interpretation unduly restricting the scope of beneficial provisions is to be avoided so that it may not take away with one hand what the policy gives with the other. Similarly Hon ble Supreme Court in the case of Mangalore Chemicals and Fertilizers Ltd. v. DCCE 1991 (8) TMI 83 - SUPREME COURT OF INDIA held the same views while drawing distinctions between procedural conditions of a technical nature and substantive condition in interpreting statute. - Allowed the rebate claims after satisfying that duty paid goods have been exported. Decided in favor of Assessee.

Summary

Issues Involved:
1. Rejection of rebate claims due to non-compliance with direct export from the factory or approved warehouse.
2. Establishment of identity and co-relation of goods exported with goods cleared from the factory.
3. Compliance with procedural requirements under relevant circulars and notifications.

Detailed Analysis:

1. Rejection of Rebate Claims Due to Non-Compliance with Direct Export from Factory or Approved Warehouse:
The Assistant Commissioner (Rebate), Central Excise, Raigad, initially rejected the rebate claims on the grounds that the excisable goods were not exported directly from the factory of manufacture. The claimant had cleared the goods for home consumption and subsequently exported them from a hired godown, which was not approved under Rule 20 of Central Excise Rules, 2002. The Commissioner (Appeals) overturned this decision, noting that the goods were stored in a dealer's godown and not an approved warehouse, but the identity and duty-paid nature of the goods could still be established through other means.

2. Establishment of Identity and Co-Relation of Goods Exported with Goods Cleared from the Factory:
The Commissioner (Appeals) found that the identity and co-relation of the goods could be established through documentation, including ARE-1 forms certified by Central Excise officers, consignment notes, and returns filed with the Narcotics Control Bureau. The goods in question, Acetic Anhydride, are a controlled substance, and their movement is stringently regulated. The Commissioner (Appeals) concluded that procedural infractions should not deprive the claimant of the substantial right of rebate, especially when the Central Excise and NCB departments were kept informed at every stage.

3. Compliance with Procedural Requirements Under Relevant Circulars and Notifications:
The applicant department contended that the claimant did not comply with the procedural requirements stipulated in Notification No. 19/2004-C.E. (N.T.) and C.B.E. & C. Circular No. 294/10/97-CX., dated 30-1-1997. However, the Commissioner (Appeals) observed that the jurisdictional Superintendent had verified the duty payment and was satisfied with the identity of the goods. The Government noted that the documentary evidence provided by the claimant established the co-relation between the goods exported and those cleared from the factory. The Government also referenced the Supreme Court's stance on avoiding unduly restrictive interpretations of beneficial provisions.

Conclusion:
The Government upheld the Commissioner (Appeals)' decision, stating that the rebate claims were rightly allowed after establishing that the duty-paid goods were exported. The revision application filed by the applicant department was rejected for being devoid of merit. The judgment emphasized that procedural infractions should not negate the substantial right to rebate when the identity and duty-paid nature of the goods are adequately established.