2015 (9) TMI 1326 - HC - Central Excise

Denial of rebate claim - export of duty paid goods (Sugur) from warehouse - petitioner has not complied with the conditions and procedure of Notification No. 40/2001- CE(N.T) dated 26.06.2001 - Held that - Benefit envisaged by the notification No.294/10/1997-CE, dated 30.1.1997 was in the nature of a concession to which any exporter is entitled however it is subject to the strict compliance with the conditions mentioned therein. On a perusal of the entire record as well as the impugned order passed by the authorities, this Court is the considered view that the impugned order does not suffer any illegality or irregularity in order to interfere with the same since as held by the authorities that the petitioner has not proved by adducing satisfactory documentary evidence that the goods cleared from the factory on payment of duty and the goods exported through the merchant exporter were one and the same and thereby the duty paid character of the goods exported remained unsubstantiated. Petitioner has committed serious lapses and miserably failed to comply with the conditions of the notification and the very basic condition that the goods cleared on payment of duty for home consumption are the same which were subsequently exported through the shipping bills and thereby it is proved beyond reasonable doubt that the goods exported are the same which were cleared on payment of duty and this corequirement was not discharged in order to claim refund of the duty. - Decided against assessee.

Summary

Issues:
Challenge against order rejecting rebate claims for duty paid on exported sugar due to procedural infractions.

Analysis:
The petitioner, a cooperative society engaged in sugar manufacturing, cleared sugar for export in 100 kg bags but exported in 50 kg bags due to market demand. The petitioner sought duty refund of Rs. 42,50,000 and Rs. 17,00,000 for the exported sugar. The authorities rejected the refund applications citing procedural non-compliance. The petitioner contended that despite procedural lapses, the substantive benefit of refund should not be denied, citing precedents emphasizing substantive over procedural compliance. The petitioner also relied on a Supreme Court decision regarding interpretation of exemptions.

The Government argued that the petitioner failed to comply with the conditions of Notification No. 40/2001-CE(N.T) as the goods were not exported from an approved location and lacked proper documentation to prove duty payment on exported goods. It was noted that the petitioner exported through a merchant exporter under bond without proper supervision and did not repackage the goods in 50 kg bags under authorized supervision. The Government emphasized the necessity of strict compliance with notification conditions for claiming the refund.

The Court held that while the petitioner was entitled to the concession under the notification, strict compliance with conditions was necessary. The Court found no illegality in the authorities' decision to reject the refund claim due to the petitioner's failure to substantiate that the exported goods were the same on which duty was paid. The Court distinguished the present case from precedents where minor procedural infractions were condoned, as the petitioner's lapses were substantial and failed to meet the basic condition of proving the exported goods' duty-paid status. Consequently, the Court dismissed the writ petition, emphasizing the petitioner's failure to meet the notification requirements for claiming the duty refund.

In conclusion, the judgment upholds the authorities' decision to reject the petitioner's duty refund claims due to significant procedural non-compliance, emphasizing the importance of substantiating duty payment on exported goods as per notification conditions. The Court's analysis highlights the necessity of strict adherence to procedural requirements for claiming duty refunds, even when substantive benefits are at stake.