2015 (3) TMI 862 - CGOVT - Central Excise

Denial of rebate claim - applicant a merchant-exporter has declared in impugned ARE-1 that they are availing benefit of 21/2004-C.E. (N.T.), dated 6-9-2004 and Notification 43/2001-C.E. (N.T.), dated 26-6-2001, however they failed to follow the mandatory provisions as required under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and Notification 43/2001-C.E. (N.T.), dated 26-6-2001 - Held that - applicant prepared the ARE-1 under claim of rebate and paid applicable duty at the time of removal of goods. The original authority in rebate sanctioning orders have categorically held that applicants have exported the goods under claim of rebate under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and also that range Superintendent confirmed the verification of duty payment. As such, the exported goods are duty paid goods. Once, it has been certified that exported goods have suffered duty at the time of removal, it can be logically implied that provisions of Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and Notification 43/2001-C.E. (N.T.), dated 26-6-2001 cannot be applied in such cases. There is no independent evidences on record to show that the applicant have exported the goods without payment of duty under ARE-2 or under Bond. Simply ticking a wrong declaration in ARE-1 form cannot be a basis for rejecting the substantial benefit of rebate claim. Under such circumstances, the rebate claims cannot be rejected for procedural lapses of wrong ticking. In catena of judgments, the Government of India has held that benefit of rebate claim cannot be denied for minor procedural infraction when substantial compliance of provisions of notification and rules is made by claimant. - Government finds that once the merits of rebate claims, found to be in favour of applicants, the sanction of same cannot be treated as erroneous and hence, no recovery is warranted. - Decided in favour of assessee.

Summary

Issues Involved:
Appeal against rejection of rebate claims under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.); Allegation of procedural lapses in declaration on ARE-1 forms; Review of Orders-in-Original by Commissioner; Confirmation of demand of sanctioned rebate claims by Additional Commissioner; Appeals before Commissioner (Appeals) against confirmed demands; Grounds for revision applications under Section 35EE of Central Excise Act, 1944.

Analysis of Judgment:

Issue 1: Rebate Claims Rejection
The applicant, a merchant-exporter, filed rebate claims under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.). The original authority initially sanctioned these claims, which were later reviewed by the Commissioner. The Appeals by the Department against the sanctioned claims were decided in their favor by Commissioner (Appeals). Subsequently, the Additional Commissioner confirmed the demand of already sanctioned rebate claims. The applicant appealed these confirmations, which were rejected by Commissioner (Appeals).

Issue 2: Grounds for Revision Applications
The revision applications were filed under Section 35EE of Central Excise Act, 1944 on common grounds. The applicant contended that procedural lapses in ticking declarations on ARE-1 forms should not be a basis for rejecting rebate claims. They argued that the exported goods were duty paid and exported under the relevant notification, hence the claims should not be denied based on minor procedural errors.

Issue 3: Government's Observations
The Government reviewed the case records, submissions, and Orders-in-Original/Appeal. They noted that the exported goods were duty paid and exported under the applicable notification. The Government found merit in the applicant's contention that the declarations on ARE-1 forms were mistakenly ticked, but the goods were exported under the correct notification and had suffered duty at the time of removal. They emphasized that minor procedural errors should not lead to the rejection of substantial rebate claims.

Issue 4: Decision and Ruling
The Government concluded that the rebate claims should not be denied for procedural lapses when substantial compliance with notification and rules was evident. They held that the sanction of rebate claims, found to be in favor of the applicants, should not be treated as erroneous, and no recovery was warranted. Therefore, the Government set aside the Orders-in-Appeal and restored the initial Orders-in-Original sanctioning the rebate claims, ruling in favor of the revision applications.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the case, arguments presented, and the ultimate decision rendered by the Government.