2024 (10) TMI 217 - AT - Central Excise

Violation of circular No. 1058/07/2017-18 dated 16.05.2017 - proof of export under N/N. 45/2001-CE (NT) not accepted by the lower authority - requirement of quadruplicate copy of invoice for export - HELD THAT - In the instant case the appellants have produced original and duplicate copies of invoice before the officer in charge of factory. However, they have failed to produce quadruplicate copy of invoice. From the procedure prescribed for export it is seen that the original, duplicate and quadruplicate copies of invoice all travelled the same route. The Duplicate copy of invoice always remains in the custody of revenue and is never in custody of exporter. The original and quadruplicate remain in the custody of exporter for most of the time. In this background this felt that duplicate copy of endorsed invoice is the most full proof evidence of export of goods and production of quadruplicate copy of invoice is only a supporting proof. In case the appellant has failed to produce quadruplicate copy of invoice, the revenue could have verified the facts from the port of export directly. There was no necessity of rejecting the proof of export on this account. The production of original and duplicate copies of duly endorsed invoice is a sufficient proof of export. The board circular dated 16.08.2017 relied by the appellant points out that in view of the indo Bhutan agreement trade, commerce and transit, the payments can be received in Indian Rupees and there is no necessity of producing any certificate for receipt of payment in freely convertible currency as required under Notification No.45/1-CE (NT). In the background there is no necessity of producing any bank certificate regarding receipt of payment in freely convertible currency. Consequently, this ground also does not survive. It is seen that the hydro electric Project for which goods has been exported entirely funded by India through norms with the facilities for payment in Indian rupees. In this circumstances the amendment although made on 16 August, 2017 i.e. after the export shall be deemed to be clarificatory in the nature. Appeal allowed.

Summary

Issues:
1. Acceptance of proof of export under Notification No. 45/2001-CE (NT)
2. Requirement of quadruplicate copy of invoice for export
3. Validity of producing original and duplicate copies of invoice as proof of export
4. Necessity of producing bank certificate for receipt of payment in freely convertible currency
5. Impact of Indo-Bhutan agreement on payment in Indian rupees for exports

Analysis:
1. The appellant, engaged in exporting goods under Notification No. 45/2001-CE (NT), faced issues with the acceptance of proof of export. The appellant provided necessary documentation, but the lower authority rejected it, leading to the appeal.

2. The requirement of a quadruplicate copy of the invoice for export was highlighted in various appeal cases. The failure to produce this copy led to the rejection of proof of export in some instances, despite the acceptance of original and duplicate copies as sufficient proof in other cases.

3. The judgment emphasized that the production of original and duplicate copies of the invoice is a substantial proof of export. The duplicate copy, always in the revenue's custody, serves as a crucial piece of evidence, with the quadruplicate copy considered a supporting proof.

4. The necessity of producing a bank certificate for receipt of payment in freely convertible currency was challenged based on the Indo-Bhutan agreement. The circular dated 16.08.2017 clarified that payments in Indian Rupees were acceptable, eliminating the need for a bank certificate regarding payment currency.

5. The judgment considered the funding of the hydroelectric project by India, allowing payments in Indian Rupees. This context rendered the amendment clarificatory in nature, impacting the requirement for bank certificates and reinforcing the acceptance of original and duplicate copies as valid proof of export.

In conclusion, the impugned orders were deemed unsustainable, and the appeals were allowed based on the comprehensive analysis of the issues surrounding proof of export, invoice requirements, payment currency, and the impact of the bilateral agreement on exports to Bhutan.