2015 (3) TMI 1040 - CGOVT - Central Excise

Denial of rebate claim - Supply of goods to SEZ - Revenue denied claim on the ground that applicant did not supply the goods under Bill of Export - Held that - In terms of Board s Circular No. 29/2006-Cus., dated 27-12-2006, the supply from DTA to SEZ shall be eligible for claim of rebate under Rule 18 of Central Excise Rules, 2002 subject to fulfilment of conditions laid thereon. Government further observes that Rule 30 of SEZ Rules, 2006 prescribes for the procedure for procurements from the Domestic Tariff Area. As per sub-rule (1) of the said Rule 30 of SEZ Rules, 2006, DTA may supply the goods to SEZ, as in the case of exports, either under Bond or as duty paid goods under claim of rebate under the cover of ARE-1 form. Since rebate claim is also export entitlement benefit, the respondent was required to file Bill of export. Though Bill of Export is required to be filed for making clearances to SEZ, yet the substantial benefit of rebate claim cannot be denied only for this lapse. Government observes that Customs Officer of SEZ Unit has endorsed on ARE-1 form that the goods have been duly received in SEZ. As the duty paid nature of goods and supply the same to SEZ is not under dispute, the rebate on duty paid as goods supplied to SEZ is admissible under Rule 18 of Central Excise Rules, 2002. Commissioner (Appeals) has rightly allowed the rebate claims in these cases - No infirmity in impugned Order-in-Appeal - Decided against assessee.

Summary

Issues:
1. Appeal against Order-in-Appeal No. BC/20/SURAT-II/2011 regarding rebate claim on goods supplied to SEZ.
2. Non-availability of Bill of Export for rebate claim.
3. Interpretation of SEZ Rules and Circulars for rebate claims.
4. Compliance with Rule 30 of SEZ Rules, 2006 for rebate claims.
5. Admissibility of rebate on duty paid goods supplied to SEZ.

Analysis:
The revision application was filed against Order-in-Appeal No. BC/20/SURAT-II/2011 concerning the rebate claim on goods supplied to Special Economic Zone (SEZ). The Department contended that the goods were supplied without a Bill of Export, which is a mandatory requirement for rebate claims under Rule 30 of SEZ Rules, 2006. The Commissioner (Appeals) had favored the respondent, leading to this appeal before the Central Government.

The Department argued that the adjudicating authority erred in allowing the rebate claim without the Bill of Export, contrary to established legal principles. They cited a case law emphasizing that exceptions to the requirement of essential documents are only applicable if the lapse is due to the Central Excise or Customs Department. The Department highlighted the absence of any mitigating factors justifying the relaxation of the binding condition.

The Government carefully reviewed the case records and noted that the goods were supplied to SEZ units with rebate claims under Rule 18 of Central Excise Rules, 2002. The original authority rejected the rebate claims due to the absence of the Bill of Export, as mandated by SEZ Rules and Circulars. However, the Government observed that the supply from Domestic Tariff Area (DTA) to SEZ is eligible for rebate claims subject to specific conditions, as outlined in relevant Circulars and Rules.

Further analysis revealed that the SEZ Rules allow for the supply of goods to SEZ under duty paid status with a claim of rebate using the ARE-1 form. While the Bill of Export is required for clearances to SEZ, the substantial benefit of rebate claims should not be denied solely for this lapse. The Customs Officer of the SEZ Unit confirmed the receipt of goods, and the duty paid nature of the goods was undisputed, justifying the admissibility of rebate claims under Rule 18 of Central Excise Rules, 2002.

Conclusively, the Government found no issues with the Order-in-Appeal and upheld the decision in favor of the respondent. The revision application was rejected for lacking merit, bringing closure to the legal dispute surrounding the rebate claims on goods supplied to SEZ.