REFUND NOT DENIABLE WHEN DUTY PAID ON DELAY EXPORT

[Mr. M. GOVINDARAJAN]

M. GOVINDARAJAN

In terms of Notification No.45/01-C.E. (N.T.), if the goods are not exported within a period of six months from the date of clearance, the assessee would deposit the duty involved therein. The Tribunal in case of 'Commissioner of Central Excise, Kolkatta V. Krishna Traders'- 2007 (216) ELT 379 (Tri. Kolkatta) has held that as the exports are not dutiable under Excise Law, delayed export if not permitted, will frustrated the object of export.  From the above it can be inferred export is having incentive of exemption from excise duty and the export should be completed within a period of six months from the date of clearance. Otherwise the assessee is to deposit the central excise duty involved therein.   Whether there is any concession if there is delay in export? Whether it can be permitted? 

Government of India's order in case of 'Modern Process Printers' indicated that the rebate/drawback and other such export promotion schemes of Government, are incentive oriented beneficial schemes intended to the goods export in order to promote export and to earn more foreign exchange for the country.   In case substantive fact of export is not in doubt, a liberal interpretation is to be accorded in case of technical lapses, if any, in order not to defeat the very purpose of such schemes.  In 'Birla V XL Ltd.,' 1998 (99) ELT 387 (Tri) it was held rebate of duty was extended to the assessee for the goods having been exported, non following of procedure under Rule 12(1) of Central Excise Rules, cannot be made the basis for denial of substantive benefit.

In 'Chamuda Pharma Machinery Private Ltd., V. Commissioner of Central Excise, Ahamedabad - I' - 2009 (244) ELT 492 (Tri. Ahmd) the appellants were engaged in the manufacture of pharmaceutical machines.   Vide their invoices dated 08.12.2006 and 12.01.2007 they cleared the goods for export to Nepal under letter of undertaking executed by them and accepted by Assistant Commissioner, Central Excise, Ahamedabad.  However due to political unrest and strikes in Nepal at the time of export, the goods could not be actually delivered to Nepal based customers.

Since export could not be made at the insistence of their range officer, the appellant deposited the duty and interest in January, 2007.  The appellant, thereafter, filed an application for extension of three months period for exporting the goods to Nepal.  The said request of the appellant was accepted by the Assistant Commissioner vide letter dated 17.09.2007.  On 04.10.2007 the appellant actually exported the goods to Nepal and realized the price and submitted the proof of export with Central Excise Authorities.

The appellant claimed refund of duty already paid vide their letter dated 29.01.2008.   A show cause notice was issued to the appellant for denial of refund on the ground that the export took place after a period of six months as provided under Notification NO. 45/2001-C.E., (N.T.) and as such goods having been exported after a period of six months, refund cannot be entertained. On the same ground, Commissioner (Appeals) rejected the refund.   Aggrieved against the order of Commissioner (Appeals) the appellant filed the present appeal.

The appellant contended the following before the Tribunal:

§ In absence of any dispute about the actual export of the goods, demand of duty on the same was not justified;

§ Notification is only a procedural notification so as to ensure that the goods are actually exported and the limit of six months is provided in the ordinary circumstances;

§ The goods could not be exported earlier on account of unrest in Nepal and subsequent export not having been in dispute, the appellants are entitled to refund of duty deposited by them;

§ The notification cannot create liability against them inasmuch as no duty is recoverable on the exported goods and they could have cleared the goods under the claim of rebate;

§ Even in clandestine removal, duties are not demanded if it is proved that the good are exported;

§ Notification in question is not creating substantive charge and is only a procedure  notification;

§ The extension of time of export having been granted by Assistant Commissioner, it was not open to the same authority to have held that there was no provision under the notification for allowing extension.

The tribunal found that admittedly the goods have been exported to Nepal.  Keeping in view the fact that the goods could not be earlier exported on account of unrest in Nepal, the Tribunal was of the view that denial of refund of duty paid by the appellant on the admittedly exported goods, is not in consonance with the export scheme and intention of the legislature to boost export.