2014 (1) TMI 1468 - HC - Central Excise

Denial of rebate claim - Rebate in terms of Rule 18 of the Central Excise Rules, 2002 and notification no.19/2004 dated 6.9.2004 - Appellate authority allowed rebate claim - Held that - When the Revenue authorities as well as revisional authority have concurrently come to the conclusion that there was direct co-relation of goods manufactured in the factory with the goods being exported and when such fact was established through reliable, undisputed and contemporaneous documentary evidence, we are not inclined to interfere in the writ jurisdiction under Article 226 of the Constitution of India - Revisional authority, as noted above, confined this decision to the facts of the case and has in fact provided that such lapses cannot be allowed to be repeated time and again and in case of future reoccurrence of non-compliance of prescribed procedure, department would be justified in viewing such matter as substantial non-compliance of prescribed procedure resulting into rejection of rebate claim - Decided against Revenue.

Summary

Issues:
Petitions challenging rebate claims under Central Excise Rules and a notification, breach of condition 2(a) of the notification, direct co-relation of goods manufactured and exported, procedural lapses, reliance on previous judgments, undertaking given by respondent, interference in writ jurisdiction, examination of essential conditions, future implications of non-compliance.

Analysis:
The petitions involved challenges to rebate claims filed by respondents under Central Excise Rules and a specific notification. The main objection raised by the department was the alleged breach of condition 2(a) of the notification by the respondent manufacturer. The condition required excisable goods to be exported directly from a factory or warehouse after payment of duty, without deviation unless permitted otherwise. The department contended that the goods were manufactured in Gujarat but were exported from Maharashtra, breaching the mentioned condition. The petitioner argued that rebate claims should not have been granted due to non-fulfillment of essential requirements. Reference was made to a Division Bench judgment of the Himachal Pradesh High Court emphasizing the importance of the condition in question.

Upon reviewing the documents and contentions, it was found that all authorities had consistently established a direct co-relation between the goods manufactured and those exported by the respondent, leading to the approval of rebate claims. The respondent provided detailed explanations and evidence to support the genuine nature of their claims, including the certification by Customs Authorities and compliance with procedural requirements. The Government accepted these contentions and rejected the department's revision petition, citing similar cases and emphasizing that procedural lapses should not be repeated.

Before the Adjudicating Authority, the respondent relied on a Supreme Court judgment emphasizing the avoidance of technicalities for refunding small amounts collected wrongly. The respondent also gave an undertaking to ensure non-repetition of procedural non-compliance instances. The concurrent conclusions of Revenue authorities and the revisional authority regarding the direct co-relation of manufactured and exported goods, supported by reliable documentary evidence, led the Court to refrain from interference in the writ jurisdiction. The Court left open the question of examining the essentiality of the condition in future cases, noting the warning against repeated procedural lapses and the potential rejection of rebate claims for substantial non-compliance.

In conclusion, the Court disposed of the petitions without entertaining them, highlighting the central legal question raised by the department for future examination. The judgment emphasized the importance of compliance with procedural requirements and the implications of non-compliance on rebate claims in subsequent cases.