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2005 (11) TMI 100 - CGOVT - Central ExciseRebate - Proof of Export - Interpretation of statutes - cleared 100% Printed Polyester fabrics - demand - interest - HELD THAT - In view of the above facts and circumstances Govt., finds force in the contention of the applicants that they have cleared vide the above said AR4s blended MMF of Chapter Heading 55.12 but inadvertantly noted the description of the goods as 100% polyster printed fabrics. In case of Union of India v. Suksha International Nutan Gems Anr 1989 (1) TMI 316 - SUPREME COURT , the Hon'ble Supreme Court has observed that an interpretation unduly restricting the scope of beneficial provision is to be avoided so that it may not take away with one hand what the policy gives with the other. In Union of India v. A. V. Narasimhalu 1969 (9) TMI 41 - SUPREME COURT , the Apex Court also observed that the administrative authorities should instead of relying on technicalities, act in a manner consistent with the broader concept of justice. While drawing a distinction between a procedural condition of a technical nature and a substantive condition in interpreting statute similar view was also propounded by the Apex Court in Mangalore Chemicals and Fertilizers Ltd. v. Deputy Commissioner 1991 (8) TMI 83 - SUPREME COURT . In fact, it is now a trite law that the procedural infraction of Notifications/circulars etc. are to be condoned if exports have really taken place, and the law is settled now that substantive benefit cannot be denied for procedural lapses. Procedure has been prescribed to facilitate verification of substantive requirements. The core aspect or fundamental requirement for rebate is its manufacture and subsequent export. As long as this requirement is met, other procedural deviations can be condoned. In the present case also, as stated that, the broad description of goods is mainly tallying with the vital documents namely invoices/ARE-I and Shipping Bills and substantially tallying with other collateral evidences like purchase order Bank Realisation Certificate, etc. There is no doubt about the fact of manufacture and export of the goods. Goods have been exported under Customs Supervision certifying that the goods exported are covered by the respective ARI.-1. Govt. thus feels that in view of collateral evidences and fats of manufactured/and subsequent export having been proved by collateral evidences as discussed, demand of duty cannot be enforced merely on account of difference in description mentioned on AR4's/Shipping Bills. Thus, the impugned Order-in-Appeal is not maintainable and Govt., accordingly, sets aside the impugned Order-in-Appeal. The Revision Application succeeds with and accordingly allowed.
Issues Involved:
1. Discrepancy in the description of goods on AR4 forms and shipping documents. 2. Validity of the demand for Central Excise duty and penalties. 3. Consideration of procedural lapses versus substantive compliance. Detailed Analysis: Issue 1: Discrepancy in the Description of Goods The primary issue revolves around the mismatch between the description of goods on AR4 forms and the corresponding shipping documents. The AR4 forms indicated the goods as "100% polyester printed fabrics," while the shipping documents described them as "52% polyester 48% cotton dyed/printed fabrics." This discrepancy was identified in multiple AR4 forms and shipping bills, leading to a show cause notice and subsequent adjudication. Issue 2: Validity of the Demand for Central Excise Duty and Penalties The adjudicating authority confirmed a demand of Rs. 5,63,109/- under Section 11A read with Rule 14A of the Central Excise Rules, 1944, along with interest under Section 11AB of the Central Excise Act, 1944. Additionally, a penalty of Rs. 50,000/- was imposed under Rule 173Q/209A/14A of the Central Excise Rules, 1944. The adjudicating authority found that the goods described in the AR4 forms were not the same as those exported, thus justifying the demand and penalties. Issue 3: Consideration of Procedural Lapses versus Substantive Compliance The applicant contended that the discrepancy was due to clerical errors and provided various documents, including letters, certificates from suppliers, and verification reports from Central Excise authorities, to support their claim that the goods exported were indeed 52% polyester and 48% cotton. The government examined these documents and found that the quantity, marks, and numbers of the goods were consistent across all documents. The government also referenced several Supreme Court judgments emphasizing that procedural lapses should not override substantive compliance. The judgments highlighted that benefits should not be denied on technical grounds if the core requirement of export is met. In this case, the government found that the goods were manufactured and exported as claimed, albeit with procedural discrepancies in documentation. Conclusion: The government concluded that the discrepancy in the description of goods on the AR4 forms and shipping documents was a procedural lapse and not a substantive violation. The core requirement of manufacture and export was met, and the procedural deviations could be condoned. Consequently, the demand for duty and penalties was not enforceable merely due to the difference in descriptions. Order: The impugned Order-in-Appeal was set aside, and the Revision Application was allowed, providing relief to the applicant.
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