2014 (12) TMI 951 - CGOVT - Central Excise

Denial of rebate claim - Failure to produce relevant Bank Realization Certificates - respondent themselves requested for cancellation of the rebate claims - Rebate claims were rejected by the original authority holding that their original claims being no more live for consideration, as the claims filed on 22.10.2012 were barred by limitation of time as stipulated under Section 11B - Commissioner (Appeals allowed the appeals with consequential benefits - Held that - Commissioner (Appeals) has observed that mere cancellation request by the applicant party cannot be treated as closure of rebate claim. Government notes that mere cancellation request for the reasons of non-realization of export proceeds cannot be the reason for rejection, if such export proceeds are realized subsequently within prescribed statutory time limit or extended time granted by the RBI. On perusal of documents submitted by the respondent it is observed that he has submitted the impugned BRCs after stipulated time limit. Further, they could not produce any extension of time limit granted by RBI. Under such circumstances, Government holds that the appellate authority is correct that mere cancellation request of the respondent cannot be treated as closure of rebate claim, provided the BRCs are submitted within the extended time limit by the RBI. Otherwise, if no such extension is granted, then rebate claims would be treated as time barred as contested by the revenue. Under such circumstances, in the interest of justice, Government is of the opinion that cases may be remanded back to decide the same afresh. The respondents are required to submit formal extension of time limit by the RBI within 90 days of receipt of this order. - Matter remanded back - Decided partly in favour of Revenue.

Issues Involved:

1. Timeliness of the rebate claims.
2. Validity of the rebate claims after initial cancellation.
3. Interpretation of Section 11B of the Central Excise Act, 1944.
4. Requirement and submission of Bank Realization Certificates (BRCs).
5. Adherence to judicial precedents and appellate authority orders.

Issue-wise Detailed Analysis:

1. Timeliness of the Rebate Claims:

The respondent initially filed rebate claims for duty paid on exported goods but later requested the cancellation of these claims due to the inability to produce Bank Realization Certificates (BRCs). The original authority rejected the rebate claims as time-barred under Section 11B of the Central Excise Act, 1944, when the respondent resubmitted the BRCs after a significant delay. The appellate authority, however, allowed the appeals, directing the rebate sanctioning authority to consider the claims on merit, which led to the sanctioning of the rebate claims.

2. Validity of the Rebate Claims after Initial Cancellation:

The applicant contended that the respondent's request to treat the rebate claims as cancelled meant that the claims ceased to exist and were no longer pending for decision. The subsequent submission of BRCs and request for sanction of the rebate claims were treated as fresh claims, which were time-barred. The appellate authority, however, held that the initial cancellation request did not equate to a complete withdrawal of the claims and that the claims were still live pending a decision.

3. Interpretation of Section 11B of the Central Excise Act, 1944:

The applicant argued that the subsequent letters from the respondent amounted to fresh claims, which were time-barred under Section 11B. The appellate authority disagreed, stating that the original filing date should be considered, and the claims should not be treated as fresh claims. The Government observed that the appellate authority's interpretation was correct, provided the BRCs were submitted within the extended time limit granted by the RBI.

4. Requirement and Submission of Bank Realization Certificates (BRCs):

The appellate authority noted that neither Rule 18 of the Central Excise Rules, 2002, nor the relevant notification required BRCs as a mandatory document for filing or sanctioning rebate claims. The Government found that the respondent submitted the BRCs after the stipulated time limit and did not produce any extension granted by the RBI, which is crucial for the validity of the rebate claims.

5. Adherence to Judicial Precedents and Appellate Authority Orders:

The applicant cited judicial precedents, including the case of Sudhir Papers Ltd. vs. Commissioner of C.Ex., Bangalore, to support the argument that withdrawn claims cannot be revived and are subject to the limitation period. The appellate authority, however, relied on the precedent set by the Hon'ble High Court of Madras in the Grasim Industries case, which emphasized the principle of judicial discipline and the need to follow appellate authority orders unless stayed by a competent court.

Conclusion:

The Government concluded that the appellate authority was correct in holding that the mere cancellation request did not close the rebate claims, provided the BRCs were submitted within the extended time limit by the RBI. However, since the respondent failed to produce any extension granted by the RBI, the rebate claims would be time-barred if no such extension was granted. The cases were remanded back to the original authority to decide afresh, with the respondent required to submit formal extension of time limit by the RBI within 90 days.

Disposition:

The impugned orders-in-appeal were set aside, and the cases were remanded back to the original authority for fresh consideration. The revision applications were disposed of accordingly.

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