2018 (11) TMI 17 - HC - Central Excise

Rebate of Excise Duty and sugar cess paid - white sugar - Rule 18 of the Central Excise Rules, 2018 - N/N. 19 /04 CE (NT) dated 06.09.2004 - correlation of the duty paid goods with the export goods - discrepancies in the documents over the correlation of the duty paid goods to the ones exported by the canalizing agent - Held that - Revenue had not disputed the fact of availability of proof of shipment of the subject quantity of white sugar to Bangladesh by the petitioners through the Canalizing Agent and the ARE1 is endorsed by the proper officer of customs to that effect. When the export is not disputed by the revenue, the rebate claim cannot be rejected on the ground of procedural infractions - rebate allowed. Eligibility of sugar cess as rebate - Held that - The petitioners have filed an array of transactional documents to co-relate the export endorsed in the ARE1 by the proper officer of customs with the duty paid invoices issued at the factory during June 2006. The department also have the means to collect the trail of goods cleared from the factory to the Chennai Port Trust Warehouse and sale to M.s MMTC Ltd and thereafter to the Port for shipment and movement onboard vessel - matter remitted back to the original authority for fresh consideration in the light of the observations made in this order after giving opportunity of hearing to the petitioners and to file documents to establish their claims. Petition allowed in part and part matter on remand.

Summary

Issues: Rebate claim for excise duty and sugar cess, discrepancies in documents, eligibility for rebate, rejection of rebate claim, legality of rejecting sugar cess rebate

In the judgment delivered by Mrs. Justice J. Nisha Banu of the Madras High Court, the issues revolved around rebate claims filed by M/s.Shri Ambika Sugars Limited and M/s.Thiru Arooran Sugars Limited for excise duty and sugar cess paid on exported white sugar. The petitioners claimed rebates under Rule 18 of the Central Excise Rules, 2018, for goods cleared to Bangladesh through a canalizing agent, M/s.MMTC Ltd. Discrepancies were found in the documents submitted, including missing details of duty payment and inconsistencies in dates. The rebate claims were rejected by the authorities citing these discrepancies and ineligibility under the law for sugar cess rebate. The petitioners argued that the proof of export should suffice for rebate claims and relied on legal precedents to support their case.

The court acknowledged the significant discrepancies in the documents but emphasized that the revenue had not disputed the actual export of the goods. It was noted that the rejection was based solely on the inability to correlate duty paid goods with the exported ones. The court highlighted that if export is proven and not disputed, procedural infractions should not lead to rebate claim rejection unless mala-fide intent is proven. Upholding the principle of non-exporting of taxes, the court emphasized that rejecting claims when export is established would defeat the purpose of the rebate scheme.

Regarding the eligibility of sugar cess for rebate, the court referred to a decision by the High Court of Karnataka, emphasizing that sugar cess rebate should be sanctioned under the law. Upon reviewing the case records, the court found that the petitioners had provided transactional documents to link the export with duty paid invoices. The court directed the case to be remitted back to the original authority for fresh consideration, allowing the petitioners an opportunity to substantiate their claims. The judgment concluded by allowing the writ petitions on specified terms without costs, closing the connected miscellaneous petitions.