2005 (11) TMI 21 - CGOVT - Customs

EXIM Rebate of excise duty on raw material used for the production export goods Declaration filed as per Ntf. No. 42/94-CE(NT) -Rebate being a beneficial scheme, it should have been interpreted liberally Procedural infractions of notification/circular are to condoned if export have taken place actually, substantive benefit cannot be denied

Summary

Issues:
1. Rebate claim disallowed on grounds of non-compliance with Notification No. 41/2001-C.E.(N.T.)
2. Permission granted under erstwhile Notification No. 42/94-C.E.(N.T.) challenged under present Rules.
3. Discrepancies in filing declaration and input-output ratio for rebate claim.
4. Interpretation of procedural lapses in export promotion schemes.
5. Denial of export relief based on technical grounds.

Issue 1: Rebate claim disallowed on grounds of non-compliance with Notification No. 41/2001-C.E.(N.T.)
The Revision Applications were filed against the Order-in-Appeal disallowing rebate claims by M/s. Modern Process Printers. The claims were rejected due to non-compliance with conditions under Notification No. 41/2001-C.E.(N.T.). The Commissioner of Central Excise (Appeals) set aside the order, emphasizing the mandatory nature of the conditions stipulated in the notification for rebate eligibility.

Issue 2: Permission granted under erstwhile Notification No. 42/94-C.E.(N.T.) challenged under present Rules
The applicant argued that the permission obtained under the erstwhile Notification No. 42/94-C.E.(N.T.) should be valid under the present Rules. They contended that the procedural lapse should not deny the rebate claim, citing a Tribunal decision supporting this stance. The Government noted the discrepancy in filing declarations under different notifications but acknowledged the permission granted under the previous rule.

Issue 3: Discrepancies in filing declaration and input-output ratio for rebate claim
The Government highlighted that while the applicants did not file a declaration as per the relevant Notification, they had submitted one under the previous notification. The Government emphasized that technical lapses should not defeat the purpose of export promotion schemes, citing various judicial precedents supporting a liberal interpretation in cases of procedural deviations.

Issue 4: Interpretation of procedural lapses in export promotion schemes
The Government, in line with judicial observations, emphasized that procedural infractions should not override the substantive requirement of actual export. The core aspect for rebate eligibility is the manufacture and subsequent export, and procedural deviations can be condoned if the substantive requirement is met. The Government referred to several decisions supporting this interpretation.

Issue 5: Denial of export relief based on technical grounds
Considering that the substantive fact of actual export was not disputed, the Government concluded that denial of export relief solely on technical grounds was unjustified. The impugned Order-in-Appeal was set aside, and the original rebate sanctioning authority's decision was restored, allowing the Revision Application.

This comprehensive analysis of the judgment addresses the key issues raised in the case involving rebate claims and compliance with notification requirements, highlighting the significance of procedural lapses in export promotion schemes and the interpretation of technical grounds for denying export relief.