2015 (3) TMI 951 - CGOVT - Central Excise

Denial of refund claim - Applicants had supplied LSHF/HS Diesel to Indian Navy from the duty paid stock and claimed refund on the ground that supplies to Indian Navy were exempt from payment of duty - Held that - exports under Rule 18 or 19 are under two different schemes. Rule 18 governs the export of duty paid goods under rebate claim while Rule 19 governs the export of goods without payment of duty under Bond/UT-I. Both the schemes are altogether different from each other and are regulated by different procedure/conditions. Exporter has to carefully choose the scheme beneficial to him before hand and has to follow the applicable procedure and conditions. It is not permissible to amalgamate both the scheme at his sweet will. In this case applicant had opted for exports without payment of duty under UT-I in terms of Rule 19, so the exports will have to be governed with the provision of said rule. The said declaration of export without payment of duty under Rule 19 itself put prohibition on allowing rebate claim. The instant claim of applicant that he has exported duty paid goods is self-contradictory and also not found correct on verification by both the lower authority. Even applicant could not satisfy this authority also. - No infirmity in impugned orders - Decided against assessee.

Issues Involved:
1. Entitlement to rebate claims under Rule 18 of Central Excise Rules, 2002.
2. Procedural compliance under Rule 19 of Central Excise Rules, 2002.
3. Correlation of duty paid goods with exported goods.
4. Applicability of Notification No. 19/2004-C.E. (N.T.) and related Circulars.
5. Rejection of refund claims on procedural grounds.

Issue-wise Analysis of Judgment:

1. Entitlement to Rebate Claims Under Rule 18:
The applicant argued that they were entitled to rebate claims under Rule 18 of the Central Excise Rules, 2002, as they had exported duty-paid goods procured from M/s. BPCL. They contended that the correlation between the duty-paid goods and the exported goods was established. However, both the lower authorities and the Government found that the goods exported under bond (UT-I) could not be correlated with the duty-paid goods procured from BPCL. The relevant documents, including ARE-1 forms and Central Excise Invoices, did not support the claim that the exported goods were duty-paid. Therefore, the claim for rebate under Rule 18 was rejected.

2. Procedural Compliance Under Rule 19:
The applicant exported goods under bond (UT-I) without payment of duty in accordance with Rule 19 of the Central Excise Rules, 2002. The Government noted that the export procedures under Rule 18 and Rule 19 are distinct and cannot be amalgamated. The applicant had opted for exports without payment of duty under Rule 19, and thus, the exports were governed by the provisions of that rule. The claim for rebate under Rule 18 was contradictory to the procedure followed under Rule 19, leading to the rejection of the rebate claim.

3. Correlation of Duty Paid Goods with Exported Goods:
The applicant claimed that the exported goods were duty-paid and procured from BPCL. However, the lower authorities and the Government found that the correlation between the duty-paid goods and the exported goods was not established. The ARE-1 forms, Central Excise Invoices, and Shipping Bills did not specify BPCL as the manufacturer or indicate that the exports were under a rebate claim. The factual details recorded in the documents showed that the goods were exported under bond without payment of duty, leading to the conclusion that the goods exported could not be treated as duty-paid goods.

4. Applicability of Notification No. 19/2004-C.E. (N.T.) and Related Circulars:
The applicant argued that they had satisfied the conditions of Notification No. 19/2004-C.E. (N.T.) and that procedural lapses should be ignored if substantive conditions were met. They cited various case laws to support their claim. However, the Government found that the cited case laws were not applicable as the applicant failed to meet the mandatory requirement that the same goods which suffered duty at the time of clearance from the factory should be exported to claim rebate under Rule 18. The Government emphasized that procedural and substantive requirements must be strictly followed.

5. Rejection of Refund Claims on Procedural Grounds:
The applicant's refund claims were rejected by the original authority and upheld by the Commissioner (Appeals) on the grounds that the goods exported under bond could not be correlated with the duty-paid goods procured from BPCL. The Government supported this decision, stating that the applicant's claim of exporting duty-paid goods was not supported by valid documentary evidence. The procedural infractions and failure to follow the stipulated export procedures under Rule 19 further justified the rejection of the refund claims.

Conclusion:
The Government upheld the Orders-in-Appeal and rejected the revision application, finding no infirmity in the decisions of the lower authorities. The applicant's claims for rebate under Rule 18 were denied due to the lack of correlation between the duty-paid goods and the exported goods, and the procedural lapses in following the export procedures under Rule 19. The judgment emphasized the importance of adhering to the specific procedures and conditions stipulated under the Central Excise Rules for claiming rebates and refunds.

← Previous Next →