2015 (1) TMI 942 - CGOVT - Central Excise

Denial of rebate claim - failure to produce original and duplicate copies of ARE-1 Form - held that - Non-production of the ARE-1 form would not ipso facto result in the invalidation of the rebate claim. In such a case, it is open to the exporter to demonstrate by the production of cogent evidence to the satisfaction of the rebate sanctioning authority that the requirements of Rule 18 of the Central Excise Rules 2002 read together with the notification dated 6 September 2004 have been fulfilled. As the primary requirements which have to be established by the exporter are that the claim for rebate relates to goods which were exported and that the goods which were exported were of a duty paid character. As at this stage that the attention of the Court has been drawn to an order dated 23 December 2010 passed by the revisional authority in the case of the Petitioner itself by which the non-production of the ARE-1 form was not regarded as invalidating the rebate claim and the proceedings were remitted back to the adjudicating authority to decide the case afresh after allowing to the Petitioner an opportunity to produce documents to prove the export of duty paid goods in accordance with the provisions of Rule 18 read with notification dated 6 September 2004 Order No.1754/10-CX dated 20 December 2010 of D.P. Singh, Joint Secretary, Government of India under Section 35 EE of the Central Excise Act 1944 & also placed on the record other orders passed by the revisional authority taking a similar view Garg Tex-O-Fab Pvt. Ltd. (2010 (10) TMI 880 - GOVERNMENT OF INDIA), Hebenkraft 2001 (3) TMI 124 - GOVERNMENT OF INDIA , Shreeji Colour Chem Industries v. CCE 2007 (10) TMI 523 - CESTAT, AHMEDABAD , Model Buckets & Attachments (P) Ltd. v. CCE (2007 (2) TMI 520 - CESTAT, BANGALORE) and CCE v. TISCO 2003 (2003 (3) TMI 191 - CEGAT, KOLKATA) Thus as in the present case the Petitioner has inter alia relied upon the bills of lading, banker's certificate in regard to the inward remittance of export proceeds and the certification by the customs authorities on the triplicate copy of the ARE-1 form the rebate sanctioning authority directed to reconsider the claim. - Following decision of UM Cables Ltd. Versus Union of India And Others 2013 (5) TMI 459 - BOMBAY HIGH COURT - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Rejection of rebate claims due to non-production of original and duplicate copies of ARE-1.
2. Interpretation of procedural requirements versus conditions under Rule 18 of Central Excise Rules, 2002.
3. Verification of export and duty-paid status of goods through alternative documents.

Detailed Analysis:

1. Rejection of Rebate Claims Due to Non-Production of Original and Duplicate Copies of ARE-1:
The applicant exported goods and filed rebate claims, which were rejected by the Assistant Commissioner (Rebate), Central Excise, Raigad, due to the non-production of original and duplicate copies of ARE-1 as required under Rule 18 of Central Excise Rules, 2002, read with Notification No. 19/2004-CE(NT) dated 06.09.2004. The Commissioner (Appeals) upheld this decision, leading the applicant to file a revision application under section 35 EE of the Central Excise Act.

2. Interpretation of Procedural Requirements Versus Conditions Under Rule 18 of Central Excise Rules, 2002:
The applicant argued that the requirement to submit original/duplicate copies of ARE-1 falls under procedural requirements, not conditions. They contended that procedural lapses should not invalidate the rebate claim if substantial compliance is demonstrated. They cited various case laws supporting that non-compliance with procedural requirements should not deny substantial benefits.

3. Verification of Export and Duty-Paid Status of Goods Through Alternative Documents:
The applicant provided alternative documents such as shipping bills, bills of lading, export invoices, and mate receipts, all duly signed by customs officers, to verify the export and duty-paid status of the goods. They argued that these documents collectively satisfied the requirements for rebate claims. They also emphasized that the primary duty of the rebate sanctioning authority is to verify the export and duty-paid character of the goods, which can be done through various documents, not just the original/duplicate ARE-1.

Judgment Analysis:
The Government referenced a relevant judgment by the Hon'ble High Court of Bombay in the case of UM Cables vs. UOI, which clarified that procedural requirements should not be elevated to mandatory conditions. The High Court distinguished between substantive conditions and procedural requirements, stating that while conditions and limitations for granting rebates are mandatory, procedural aspects are directory. The High Court emphasized that the primary requirements are to establish that the goods were exported and that they were of duty-paid character.

In the cited case, the High Court allowed the rebate claims to be reconsidered based on alternative documents submitted by the exporter, provided these documents satisfactorily proved the export and duty-paid status of the goods. The judgment directed the rebate sanctioning authority to reassess the claims without rejecting them solely on the non-production of original and duplicate ARE-1 forms.

Conclusion:
The Government set aside the impugned order-in-appeal and remanded the case back to the original authority for fresh consideration in light of the High Court's judgment. The original authority was instructed to reassess the rebate claims based on the documents provided by the applicant, ensuring a reasonable opportunity for hearing. The revision application was disposed of accordingly.