2016 (3) TMI 223 - AT - Central Excise

Rejection of refund claim - export of goods - non following of prescribed procedure - period of limitation - Held that - Appellants filing declaration intimating the export of goods manufactured during the year can be considered as sufficient fulfillment of the procedure in view of the appellant being SSI unit involved in 100% export. Regarding input/output norms, we find that same is not fixed by the Asstt. Commissioner for the impugned period, the appellants followed the adopted norms as per DGFT EXIM Policy. It is seen for the later financial year 2003-2004 Asstt.Commissioenr accepted the said norms after due verification. Regarding procurement of duty paid raw material, the appellants contended that said raw material are procured from the registered factory directly and duty paid documents for inputs have also been submitted along with refund claims. We find that in appellants case the ARE 2 for export has to be filed within 24 hours of clearance and as such, there is no scope for prior verification of the goods by the officers. The cleared goods have been exported and all the relevant customs clearance documents have been filed. These are not in dispute. The appellants also filed further evidence of bank realization documents certifying regular receipt of sale proceeds of exported goods. Thus we find that the substantial benefit of refund claim cannot be rejected in the present case. However, the claims which is filed beyond the period prescribed in section 11B will be hit by time bar. We find that the other claims can rightly be eligible to the appellants. To this extent, we set aside the impugned order and allow the appeal with consequential relief, if any.

Summary

Issues:
Refund claim rejection based on procedural grounds.

Analysis:
The appellant, engaged in manufacturing stainless steel products, filed refund claims seeking Cenvat credit refund for four quarters. The claims were rejected for not following prescribed procedures. The appellant argued compliance with all basic conditions, including export norms and input-output ratio. They contended that procedural lapses should not lead to claim rejection. The appellant exported goods under self-removal, submitting relevant export documents. They cited DGFT norms for input-output ratio and highlighted their registration with the Central Excise department. The appellant emphasized that procedural shortcomings should not invalidate an otherwise eligible claim, supported by case laws.

The learned AR maintained that the appellant's failure to adhere to stipulated procedures rendered them ineligible for a refund. The appeal records were examined, acknowledging the appellant's export of goods made using duty paid inputs. The rejection was solely due to procedural lapses. The Commissioner (Appeals) noted that non-adherence to procedures evaded departmental checks. However, the Commissioner did not detail how each procedural requirement impacted the claim rejection. Citing a Supreme Court decision, it was emphasized that concessional claims must adhere to prescribed methods and conditions specified in notifications. The appellant's declaration about manufacturing and export, along with adherence to DGFT norms, was considered sufficient fulfillment of procedures, especially as an SSI unit with 100% export.

The Tribunal found that while claims filed beyond the prescribed period were time-barred, other claims were eligible. The Tribunal concluded that the substantial benefit of the refund claim should not be rejected due to procedural lapses. The impugned order was set aside, and the appeal was allowed with consequential relief, if any.