2014 (1) TMI 1340 - HC - Central Excise

Rejection rebate claim due to export - Interpretation of notification - Non fulfillment of procedure prescribed in Notification No. 19/2004-C.E.(N.T.) dated 06.09.2004 issued under Rule 18 of Central Excise Rules, 2002 - Rejection of benefit of notification dated 06.09.2004 - Held that - provision has been made for the benefit of exporter but simultaneously, it also cannot be overlooked that the Government of India has also to lay down the procedure which will discourage mischievous and scrupulous persons in indulging in any mischief. At every stage, officials of respondents-authorities would come into picture to verify the exact commodity etc. which is sought to be exported in respect whereof rebate is being claimed. This is to verify that the goods actually exported are same of description, value etc., as claimed - The notification dated 06.09.2004 very clearly has said that rebate can be claimed in the manner the procedure has been laid down therein. It is difficult to hold that detail procedure regarding filing of ARE-I, which is the foundation in respect of verification of commodity sought to be exported and its exportability etc. is not mandatory but directory or condonable. I find no hesitation in confirming the view taken by respondent no. 1 that the procedure laid down in notification dated 06.09.2004 with respect to filing of ARE-I is mandatory. Explanation offered by petitioner that due to ignorance of law he could not follow the procedure of filing ARE-I, also does not appear to be genuine and creditworthy. It is not the case of the petitioner that the export in question is his first transaction of export. He himself claimed to be a Merchant Exporter and dealing in export transactions. Such a person, if claim that he was not aware of the procedure, is very dubious statement and it is difficult to belief it - procedure with respect filing of ARE-I, looking from the view of straight and simple principle of interpretation, as also looking from the angle of its objective, purpose etc., in my view, is obligatory, the order impugned in the writ petition, cannot held faulty in any manner - Decided against assessee.

Summary

Issues Involved:
1. Interpretation of Notification dated 06.09.2004.
2. Compliance with the procedure prescribed for claiming rebate under Rule 18 of the Central Excise Rules, 2002.
3. Whether the procedural lapse in filing ARE-I is condonable.
4. The mandatory nature of the procedure for filing ARE-I.
5. Validity of the petitioner's claim for rebate despite procedural non-compliance.

Detailed Analysis:

1. Interpretation of Notification dated 06.09.2004:
The primary issue revolves around the interpretation of the notification dated 06.09.2004, issued under Rule 18 of the Central Excise Rules, 2002. The notification specifies the procedure for claiming a rebate on duty paid for goods exported. The petitioner's argument hinges on whether the procedural requirements, particularly the filing of ARE-I forms, are mandatory or merely directory.

2. Compliance with the Procedure Prescribed for Claiming Rebate:
The petitioner, a Merchant Exporter, sought rebate claims for exported goods but admitted non-compliance with the prescribed procedure in the notification dated 06.09.2004. The Assistant Commissioner of Central Excise (ACCE) issued a show-cause notice due to the petitioner's failure to file ARE-I forms, which are essential for verifying the export of goods. The ACCE rejected the rebate claims, leading to a series of appeals and revisions.

3. Whether the Procedural Lapse in Filing ARE-I is Condonable:
The petitioner contended that the procedural lapse should be condoned since the goods were actually exported. The Commissioner (Appeals) initially allowed the appeal on technical grounds but was later directed by the Government of India to decide on the merits, particularly whether the procedural lapse could be condoned. The Commissioner (Appeals) eventually ruled in favor of the petitioner, considering the lapse as a technical infraction.

4. The Mandatory Nature of the Procedure for Filing ARE-I:
The crux of the judgment lies in determining whether the filing of ARE-I forms is a mandatory requirement. The notification dated 06.09.2004 outlines a detailed procedure for filing ARE-I forms, verifying the goods, and sealing them before export. The court emphasized that the procedure is designed to prevent fraudulent or bogus claims and ensure that the goods exported match the description in the documents. The court held that the procedure is mandatory, and non-compliance cannot be condoned.

5. Validity of the Petitioner's Claim for Rebate Despite Procedural Non-Compliance:
The court dismissed the petitioner's argument that the procedural lapse was due to ignorance of the law, noting that ignorance of the law is no excuse. The petitioner, being an experienced Merchant Exporter, was expected to be aware of the procedural requirements. The court affirmed that the rebate claim must adhere to the prescribed procedure, and any deviation renders the claim invalid.

Conclusion:
The court concluded that the notification dated 06.09.2004, issued under Rule 18 of the Central Excise Rules, 2002, mandates strict compliance with the procedure for filing ARE-I forms. The procedural requirements are essential to verify the authenticity of the export and prevent fraudulent claims. The petitioner's non-compliance with the procedure cannot be condoned, and the rebate claims were rightly rejected. The writ petition was dismissed, upholding the mandatory nature of the procedural requirements.