2006 (5) TMI 109 - CGOVT - Central Excise

Rejection of Rebate claim - rejection on the grounds such as difference in marks and Nos. wt. etc. - procedural/technical infractions - HELD THAT - The core aspect in determination of rebate claim is the fact of manufacture and payment of duty thereon and its subsequent export. In case this fundamental requirement is met, other attendant procedural requirements can be condoned. This is a mandatory condition. This is a trite law repeatedly pronounced in various orders of Tribunal/Govt. of India, including UPKAR INTERNATIONAL VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJKOT 2004 (1) TMI 214 - CESTAT, MUMBAI ; BIRLA VXL LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, CHANDIGARH 1997 (7) TMI 383 - CEGAT, NEW DELHI ; COLLECTOR OF CENTRAL EXCISE VERSUS TI. CYCLES OF INDIA 1983 (5) TMI 138 - CEGAT, BOMBAY ; IN RE CREATIVE MOBUS FABRICS LTD. 2003 (7) TMI 682 - GOVERNMENT OF INDIA . A procedural rule ordinarily should not be construed as mandatory, if the defect in that act done in pursuance of it can be cured by permitting appropriate rectification to be carried out at a subsequent stage unless by recording such permission to rectify the error, later on, another rule would be contravened. Whenever a statute prescribes that a particular act is to be done in particular manner and also lays down that failure to comply with the said requirements leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and specified consequence should not follow. Keeping in view the judgment of the Hon'ble Supreme Court, distinction between mandatory and directory provisions of law and catena of orders of Hon'ble Tribunal/Govt. of India that substantive benefit is to be given by condoning non-mandatory Procedural provisions Govt. sets aside both the Order-in-Appeal and Order-in-Original and remands the matter to the Original Adjudicating Authority to make verification. Revision Application is disposed of by way of remand.

Summary

Issues:
1. Rejection of rebate claim based on procedural/technical infractions.
2. Discrepancies in the description of goods in various documents.
3. Failure to examine the payment of Central Excise duty and export of goods.

Analysis:
1. The Revision Application was filed against the rejection of a rebate claim by M/s. Barot Exports. The claim was denied due to discrepancies in marks, numbers, and weight details. The Commissioner of Central Excise upheld the rejection without providing relief to the applicants.

2. The applicant contended that the description of goods in the Central Excise Invoice and ARE-1 differed from the shipping documents but provided explanations for the discrepancies. They argued that the payment of Central Excise on the goods and their export were not in question, supported by a duty payment certificate. The government noted that the rejection was based on procedural issues rather than the fundamental requirement of duty payment and export.

3. The judgment emphasized the importance of meeting the fundamental requirement of duty payment and export for rebate claims. It cited various precedents to support the principle that procedural requirements can be condoned if the core conditions are fulfilled. The distinction between mandatory and directory provisions of law was highlighted, emphasizing that substantive benefits should prevail over non-mandatory procedural provisions.

4. In light of the legal principles and precedents, the government set aside the previous orders and remanded the matter to the Original Adjudicating Authority. The Authority was directed to verify compliance with mandatory conditions such as duty payment and export of goods before deciding the case afresh, ensuring adherence to the principles of natural justice.

5. Ultimately, the Revision Application was disposed of with the order to reconsider the case based on the clarified legal principles and requirements. The decision highlighted the significance of upholding substantive benefits over procedural technicalities in matters concerning duty payment, export, and rebate claims.