2014 (12) TMI 701 - HC - Central Excise

Denial of rebate claim - Conditions, limitations and procedures, prescribed in Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, as amended, issued under Central Excise Rules, 2002, for grant of rebate of duty on export of goods, have not been adhered - Evidence As per stated that the photocopy of original can t be adduced as a secondary evidence Assistant Commissioner of Central Excise rejected the claim but on appeal filed by the respondent, Commissioner (Appeals) allowed the rebate claim but Revisional Authority again held in favour of Revenue - held that - The powers of revision have to be exercised so as to correct a jurisdictional error. In the absence of a conclusion that the findings are vitiated by an error of jurisdiction or the jurisdiction has been exercised with material irregularity resulting in manifest injustice, the revisional authority should not have interfered with the orders under challenge. That is not a power to interfere with factual findings and when they are supported by enough materials. The findings of fact consistent with the materials on record would bind the revisional authority unless they are demonstrated to be perverse or vitiated by any error of law apparent on the face of the record. There is no warrant to interfere with the same unless these tests are satisfied. Order passed by the Revisional authority is unsustainable. It is manifestly illegal and erroneous. It is also vitiated by a non-application of mind to the vital materials, namely, the shipping bills and which contain the endorsement necessary for recording a finding that the goods were indeed exported by the petitioners. The date of the ARE-1 has also been mentioned there with other details. In such circumstances, the view taken by the revisional authority cannot be sustained - Following decision of UM Cables Ltd. Versus Union of India And Others 2013 (5) TMI 459 - BOMBAY HIGH COURT - Decided in favour of assessee.

Summary

Issues Involved:
1. Rejection of rebate claim due to non-submission of original and duplicate copies of ARE-1.
2. Legality of the revisional authority's decision to reverse the appellate authority's order.
3. Procedural versus mandatory requirements in rebate claims.

Detailed Analysis:

1. Rejection of Rebate Claim Due to Non-Submission of Original and Duplicate Copies of ARE-1:
The petitioner company engaged in the manufacture and export of chemicals filed a rebate claim for Central Excise duty paid on exported goods. The claim was rejected because the petitioner failed to submit the original and duplicate copies of ARE-1, which were lost/misplaced. Despite providing collateral documents as proof of export, the rebate claim was denied. The Commissioner of Income Tax (Appeals) found that the condition of submitting original and duplicate ARE-1 copies was directory, not mandatory, and upheld the claim based on other supporting documents like the shipping bill, which contained necessary endorsements.

2. Legality of the Revisional Authority's Decision to Reverse the Appellate Authority's Order:
The revisional authority reversed the appellate authority's decision, insisting on the procedural requirement of submitting original and duplicate ARE-1 copies. The High Court found that the revisional authority's scope is limited to correcting jurisdictional errors or material irregularities. The revisional authority should not interfere with factual findings supported by sufficient materials unless they are perverse or legally erroneous. The High Court noted that the revisional authority focused solely on procedural requirements without considering substantial compliance and other proof of export.

3. Procedural Versus Mandatory Requirements in Rebate Claims:
The High Court emphasized that procedural requirements, such as submitting original and duplicate ARE-1 forms, are directory and capable of substantial compliance. The court referred to a Division Bench judgment in UM Cables Ltd. v. Union of India, which distinguished between mandatory conditions and procedural requirements. The judgment clarified that while conditions and limitations for granting rebates are mandatory, procedural aspects are directory. The court held that substantial compliance with procedural requirements, supported by other evidence of export, suffices for rebate claims.

Conclusion:
The High Court quashed the revisional authority's order, reinstating the appellate authority's decision. The court ruled that procedural requirements should not overshadow substantial compliance and other proof of export. The writ petition was allowed, and the petitioner's rebate claim was granted based on supporting documents, despite the absence of original and duplicate ARE-1 forms.