2014 (12) TMI 781 - CGOVT - Central Excise

Rebate claims - failure to follow procedure prescribed in Board s circular No.294/1O/94-Cx dated 30.1.97 - Notification No.19/2004-CE (NT) dated 6.09.2004 - Held that - Goods have been examined by the Customs at the Place of export of port as per provision of para 7.3 and 7.4 of the Chapter 8 as enumerated above. The Customs Officer has duly endorsed the duplicate copy of the ARE Is, after satisfying himself about the fact that the goods intended for export are the same which were cleared on the relevant ARE-Is Further Superintendent Central excise Range, Jalna has certified that goods cleared under the relevant ARE-Is were cleared from the factory of manufacture on payment of duty. Applicant has been able to prove the export of the duty paid goods by way of various documents duly endorsed by the Customs Officers and Certificate of Central Excise Range Superintendent certifying the duty paid nature of the exported goods. Moreover, the exported goods are co-relatable with the goods cleared from the factory of manufacture as the ARE Is, Shipping Bill, Invoice and Pan Masala Pouches/packages bear the Mark Nos/Batch Nos. of the goods The ratio of the GOI Order No. 54 to 60/09 dated 5.02. 09 in the case of M/s Gujarat Trading Co., Rajkot vs. CCE Rajkot is squarely applicable in this case wherein it has been held that where the exported goods are corelatable with the goods cleared from the factory of manufacture or warehouse, the Procedure prescribed for merchant exporter exporting the goods from a place other than factory of manufacturer or warehouse by the CBEC s Circular 294/10/97-CX dated 30.01.1997 can be relaxed and the rebate is admissible for merchant exporter. Govt. further observes that rebate/drawback etc. are export-oriented schemes. A merely technical interpretation of procedures etc. is to be best avoided if the substantive fact of export having been made is not in doubt, a liberal interpretation is to be given in case of any technical lapse. In Suksha International Vs- UOI 1989 (1) TMI 316 - SUPREME COURT , the Hon ble Supreme Court has observed that an interpretation unduly restricting the scope of beneficial provision is to be avoided so that it may not take away with one hand what the policy gives with the other. Rebate claims are admissible to the applicant in terms of Rule 18 of Central Excise, Rules; 2002 read with Notification No. 32/2008-CE (NT) dated 28.08.08 subject to verification of duty paid on the exported goods as verified by the jurisdictional Central Excise Superintendent - Decided in favour of assessee.

Issues Involved:

1. Eligibility for rebate claims under Rule 18 of the Central Excise Rules, 2002.
2. Compliance with the procedural requirements for exporting goods from a premises other than the manufacturing unit.
3. Verification of goods by Central Excise Officers.
4. Prior permission for removal of goods for export.
5. Co-relation of exported goods with goods cleared from the factory.
6. Consistency in adjudication of rebate claims.

Detailed Analysis:

1. Eligibility for Rebate Claims:
The applicant, a merchant exporter, filed rebate claims under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-CE (NT) dated 6.09.2004. The goods exported were scraps of propeller obtained from breaking ships. The department denied the claims on the grounds that the goods were not exported directly from the factory or warehouse, and no prior permission was obtained for exporting from a premises other than the manufacturing unit.

2. Compliance with Procedural Requirements:
The department contended that the applicant did not follow the procedure prescribed in Board's Circular No. 294/10/94-CX dated 30.1.1997. This included ensuring that the goods were examined by the jurisdictional Central Excise authority before export. The applicant argued that they had complied with the circular by paying merchant overtime fees (MOT) and obtaining necessary endorsements from Central Excise officers.

3. Verification of Goods by Central Excise Officers:
The department argued that there was no specific endorsement of verification by Central Excise officers on the relevant ARE-1 forms. The applicant countered this by providing proof of MOT fees payment and endorsements by the range superintendent and inspector. The Deputy Commissioner of Central Excise, Division-III, Belapur, confirmed that the goods were cleared under Central supervision from 3.10.12 onwards.

4. Prior Permission for Removal of Goods for Export:
The applicant had applied for permission to export from their premises and received approval from the department on 23.05.2011. However, the department argued that the permission granted by the Chief Commissioner on 17.09.2012 was after the subject shipment and subject to certain conditions. The applicant contended that the permission granted in 2011 was valid and should be considered.

5. Co-relation of Exported Goods with Goods Cleared from the Factory:
The government examined various shipping bills, ARE-1 forms, and duty-paying invoices to verify the co-relation between the exported goods and the goods cleared from the factory. The analysis showed that the description, weight, and quantities of the goods matched across documents, supporting the applicant's claim that the goods exported were the same as those cleared from the factory.

6. Consistency in Adjudication of Rebate Claims:
The applicant pointed out that in similar cases, rebate claims were sanctioned by the same authorities. The government observed that in an identical situation, procedural lapses could be condoned if the exported goods could be co-related with the goods cleared from the factory. The government cited various case laws supporting the view that substantive benefits should not be denied due to procedural lapses.

Conclusion:
The government found sufficient evidence to support the applicant's contention that the goods were examined before export and that the procedural requirements were substantially met. The rebate claims were found to be admissible under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 32/2008-CE (NT) dated 28.08.08. The impugned orders-in-appeal and orders-in-original were set aside, and the revision applications were allowed.

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