2014 (9) TMI 238 - HC - Central Excise

Denial of rebate claim - Revenue contends that goods were not cleared from the factory premises for the purpose of export; form AR-4 was not prepared; clearances for export had not been supervised by the jurisdictional Central Excise Office and that the claim was time-barred - Held that - The requirement of proof that goods have actually been exported to the satisfaction of the rebate sanctioning authority and where goods are clearly indentifiable and corelatable with the goods cleared from factory on payment of duty only the condition of exports being made directly from the factory/warehouse should be deemed to have been waived. As noticed hereinbefore, the three authorities below have concurrently held against the petitioner on the said issue, which finding is essentially a finding of fact, which cannot be ordinarily interfered while exercising extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India. The petitioner has failed to point out any perversity in the findings recorded by the three authorities below so as to require any interference by this Court. Decided against assessee.

Summary

Issues:
Rejection of rebate claim under Section 35EE of the Central Excise Act, 1944 based on procedural lapses and failure to establish co-relation between duty paid goods and exported goods.

Analysis:
The petitioner exported processed man-made fabrics to Aden, Yemen and filed a rebate claim under Rule 12(1)(a) of the Central Excise Rules, 1944. The Commissioner rejected the claim citing procedural lapses like non-clearance from factory premises for export and lack of supervision by Central Excise Office. The adjudicating authority concluded that the petitioner did not fulfill conditions under Notification No. 31/98-C.E. (N.T.) or follow prescribed procedures, leading to claim rejection without deciding the limitation issue.

On appeal, the Commissioner (Appeals-II) upheld the rejection stating that the petitioner failed to establish co-relation between exported and duty paid goods. The revisional authority affirmed this decision, emphasizing the mandatory requirement under Notification No. 31/98-C.E. (N.T.) to prove duty paid goods were exported. Despite judicial pronouncements favoring a liberal approach for procedural lapses, the authorities held that mandatory procedures are crucial to prevent erroneous rebate claims.

The petitioner argued that duty paid goods were exported, entitling them to rebate. They contended that the Notification dated 30-1-1997 waived the requirement of AR-4 if goods were identifiable and co-relatable with duty paid goods. However, the respondents argued that the notification applied to past cases only and did not eliminate the need for AR-4.

The High Court upheld the lower authorities' findings, emphasizing the petitioner's failure to establish co-relation between duty paid and exported goods. The court noted that the authorities' conclusions were factual and not subject to interference under extraordinary jurisdiction. As the petitioner could not demonstrate any flaws in the lower authorities' findings, the court dismissed the writ petition.

In conclusion, the court upheld the rejection of the rebate claim due to the petitioner's inability to establish co-relation between duty paid and exported goods, despite arguments regarding procedural relaxations under the Notification. The judgment highlights the importance of complying with mandatory procedures to prevent misuse of rebate claims and emphasizes the significance of proving the direct link between duty paid goods and exported items.