2015 (1) TMI 33 - CGOVT - Central Excise

Duty demand - failure to produce proof of export - Imposition of penalty - original authority accepted the proof of export, however, imposed penalty on applicants on the ground that the proof of export was submitted late - Habitual offender - Held that - rebate sanctioning authority shall not reject the rebate claim on the ground of non-submission of original and duplicate copies of ARE-1 forms if it is otherwise satisfied that conditions for grant of rebate have been fulfilled. Government, therefore, applying the ratio of above said judgement of Hon'ble High Court of Bombay in the said case, is of the view that the proof of export may be examined on the basis of collateral evidences where original and duplicate ARE-1 form is not submitted. In the light of above, Government proceeds to examine the aspect of proof of export on the basis of collateral evidences available on records or submitted by the applicants. On the basis of collateral evidences, the correlation stands established between export documents and excise documents and hence, export may be treated as completed. As such, demand of duty is not sustainable for aforesaid reasons. However, such verification has been done on the basis of copies of documents submitted by the applicants. Hence, the original authority is required to carry out necessary verification on the basis of original documents either available with applicants or submitted to the department by the applicants as claimed by them by virtue of acknowledgement of receipt of such documents. - The shipping bill Nos. mentioned in excise invoice and export invoice tallies with the shipping marks mentioned in the relevant bill of lading. Further, the quantity/weight, description of excise invoice tallies with quantity/weight and description mentioned in the export invoices. However the amount mentioned in export invoices does not tally exactly with amount mentioned in the relevant remittance documents. The applicants is required to submit such proof of remittance before original authority and if the value mentioned in export documents found tallies with the amounts mentioned in export remittance documents in dollar term then the correlation may be treated as established between export documents and excise documents and hence, export may be treated as completed. Original authority has dropped the demand of duty, however, confirmed the imposition of penalty on the ground of habitual offence of frequent failure to submit original and duplicate copies of ARE-1. Government finds that though the applicants has been extended benefit as regard to proof of export on the basis of collateral evidence in absence of original and duplicate copies of ARE-1, the applicants cannot take recourse of the habit of frequent non-compliance of such documentary requirements. Hence Government finds that for such frequent non-compliance, imposition of penalty of ₹ 10000/- cannot be faulted with and hence, upheld to the extent of such imposition. - Decided parlty in favour of assesse.

Summary

Issues Involved:
Appeal against Order-in-Appeal rejecting appeal against Order-in-Original demanding duty for export consignments; Challenge to penalty imposition under Central Excise Rules; Revision applications under Central Excise Act, 1944 before Central Government; Writ petition against Government of India order; Compliance with High Court order for fresh decision on merits; Examination of proof of export based on collateral evidences; Verification of original documents for proof of export; Imposition of penalty for habitual non-compliance.

Analysis:

1. Appeal against Order-in-Appeal: The applicants filed revision applications challenging the Order-in-Appeal that upheld the duty demand for export consignments. The original authority confirmed the duty and penalty, leading to the appeal. The Commissioner (Appeals) rejected the appeal, resulting in revision applications under section 35EE of the Central Excise Act, 1944 before the Central Government.

2. Challenge to Penalty Imposition: The applicants disputed the penalty imposed under Rule 25 of the Central Excise Rules, 2002. They argued that there was no specific contravention under the relevant rules and cited case laws in their favor. The Government observed the penalty imposition and referred to a Supreme Court case regarding the imposition of penalties, ultimately deciding to uphold the penalty for exporting goods under an invalid Letter of Undertaking.

3. Compliance with High Court Order: The Government of India initially rejected the revision applications, leading the applicants to file a writ petition before the Bombay High Court. The High Court quashed the revision order and remanded the cases back to the original authority for a fresh decision on merits in accordance with the law.

4. Examination of Proof of Export: The Government examined the proof of export based on collateral evidences submitted by the applicants. The High Court's judgment in another case was referenced, emphasizing the importance of considering collateral evidences when original and duplicate copies of forms are not submitted. The Government directed the original authority to verify the proof of export based on the collateral evidences and original documents.

5. Verification of Original Documents: The Government observed discrepancies in the submission of original documents for proof of export in various cases. It directed the original authority to conduct necessary verifications based on the original documents available with the applicants or submitted to the department for a comprehensive assessment.

6. Imposition of Penalty for Habitual Non-Compliance: The Government upheld the imposition of a penalty for habitual non-compliance with documentary requirements in one of the cases. Despite accepting collateral evidence for proof of export, the applicants' frequent failure to submit original and duplicate copies of forms led to the penalty imposition, which was deemed justified.

In conclusion, the Government set aside the Order-in-Appeal with modifications and directed the original authority to conduct thorough verifications based on original documents for a fair decision. The applicants were instructed to be given sufficient opportunity to present their case, and the revision applications were disposed of accordingly.