2015 (3) TMI 998 - CGOVT - Central Excise

Denial of rebate claim - Bar of limitation - failure to export the goods directly from the factory of manufacturer as prescribed in Board's Circular No.294/10/97-Cx dated 30.01.1997 - Held that - On perusal of sample excise documents ARE-1, and Excise Invoices, it is noticed that in ARE-1 the destination is mentioned as name of vessel and there is a mention of relevant invoices. Further, in relevant invoices, there is mention of Vessel name, to whom the goods were supplied. They have also submitted copies of, lorry receipts as evident from impugned Order-in-Original to show that the goods were directly supplied from factory of manufacturer to port of export. Once, the goods found to exported directly from factory of manufacturer to port of export, the provisions of Board's Circular No. 294/10/97-Cx dated 30.01.1997, which is applicable to case where that goods exported otherwise than directly from a factory or warehouse, is not applicable to this case. Commissioner (Appeals) has examined all the relevant document and rightly held that goods were directed exported from factory. There is no dispute that duty was not paid on said exported goods. The customs endorsement on the original and duplicate copy of ARE-1 confirming export of said goods is not challenged by department. The applicant department has not bothered to send any reply till date even after lapse of a period more than one month. In this case, the respondent has contended that fuel tank capacities of Vessels MT Neverland and MT Maersk Progress were 2938 MT and 3475 Mt whereas quantities of FO supplied were only 370.08 MTs and 390.01 MTs respectively. There is no reason to doubt the reasonableness of this quantity of fuel supplied to vessels. As such there is no merit in this objection of department. Regarding payment of interest for delayed payment of rebate claim Government notes that respondent though filed claim within one year but the complete claim alongwith requisite document as pointed out in deficiency memo were filed only on 18.4.11. So the interest is admissible only after a period of 3 months1rom the said date of 18.4.11. As per section 11BB the interest liability will arise only when the rebate claim complete in all respect is not decided within 3 months - Decided against Revenue.

Summary

Issues Involved:
1. Rejection of rebate claims due to being time-barred.
2. Non-compliance with the direct export procedure from the factory.
3. Lack of quantification certificates from the Commissioner of Customs.
4. Submission of incomplete documents for rebate claims.
5. Entitlement to interest on delayed payment of rebate.

Issue-Wise Detailed Analysis:

1. Rejection of rebate claims due to being time-barred:
The original authority rejected the rebate claims on the grounds that they were filed after the expiry of one year. The appellate authority, however, condoned the procedural lapses, citing case laws such as Cotfab Exports, Modern Process Printer, and Barot Exports, reasoning that the payment of duty was not doubted and the goods were exported under statutory documentation.

2. Non-compliance with the direct export procedure from the factory:
The department argued that the goods were not exported directly from the factory but were first stored at the premises of the exporter, which was against the provisions of Rule 18 of the Central Excise Rules, 2002, and Notification No. 19/2004-CE/(NT) dated 06.09.2004. The respondents contended that the goods were procured from M/s Essar Oil Limited and exported directly from the factory, supported by lorry receipts and endorsements from customs officers on ARE-1 forms. The appellate authority found that the goods were indeed exported directly from the manufacturer's factory, making the provisions of the Board's Circular No. 294/10/97-CX dated 30.01.1997 inapplicable.

3. Lack of quantification certificates from the Commissioner of Customs:
The department contended that the respondents did not submit quantification certificates as required by Notification No. 19/2004-CE/(NT) dated 06.09.2004. The respondents argued that the notification did not require a certificate from the Commissioner of Customs to be submitted with the rebate claim. They provided evidence that the quantity of furnace oil supplied was reasonable and within the fuel tank capacities of the vessels. The government found no merit in the department's objection, noting the reasonableness of the fuel quantities supplied.

4. Submission of incomplete documents for rebate claims:
The department argued that the respondents did not submit the original and duplicate copies of the Central Excise invoices at the time of filing their claims, which were essential for claiming a refund under section 11B of the Central Excise Act, 1944. The respondents eventually submitted the required documents on 18.04.2011. The appellate authority's finding that the claims were initially filed within the statutory time limit was deemed erroneous by the department.

5. Entitlement to interest on delayed payment of rebate:
The appellate authority granted interest on the delayed payment of rebate from the date of receipt of the initial rebate application. The department contended that the rebate claims were not complete when initially filed and were only resubmitted on 18.04.2011. The government agreed with the department, stating that interest is only admissible after three months from the date the complete claim was filed, i.e., 18.04.2011, as per section 11BB of the Central Excise Act, 1944.

Conclusion:
The government upheld the appellate authority's decision to allow the rebate claims, finding no infirmity in the Order-in-Appeal regarding the direct export procedure and the reasonableness of the fuel quantities supplied. However, the government modified the Order-in-Appeal concerning the payment of interest, agreeing with the department that interest is only payable after three months from the date the complete claim was filed. The revision applications were disposed of accordingly.