2016 (6) TMI 711 - AT - Central Excise

Denial of refund - proof of export - loss of documents ( ARE-1) in transit - Held that - Record does not reveal any dispute on eligibility of the appellant to the refund. It is only the technicalities which has prevented the department to deny the refund. Such hardship can be mitigated if the department causes an enquiry from its records to ascertain the veracity of the contents of the ARE-1 documents from the copies of in ARE-2 and also test genuinity of the transaction do reduce the dispute at the grassroot. There is also no dispute on the record that the loss of documents in transit was man-made and was within the control of the appellant. Therefore, when such loss was beyond control of the appellant, the appellant cannot be compelled to become victim thereof. Once the process of law comes into motion, fair play is to be given the provisions to effectuate the same following the ratio laid down by apex court in the case of Sambhaji Vs Gangbhai (2008 (11) TMI 393 - SUPREME COURT OF INDIA ) for the reason that the procedures are subordinate to the legislative mandate but not tyrant to law. Appeal is, therefore, remanded to Adjudication authority to cause enquiry as above and affording reasonable opportunity of hearing, shall pass appropriate order.

Summary

Issues: Refund claim denial due to loss of original documents in transit, eligibility of appellant for refund, necessity of ARE-2 documents for refund, need for departmental enquiry to verify documents, fair play in legal procedures.

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the main issue revolved around the denial of a refund claim by the Department due to the loss of original ARE-1 documents in transit. The appellant argued that the loss was beyond their control and supported by an FIR, making the refund claim valid. However, the Department contended that without the original ARE-2 documents, the refund could not be entertained. The Tribunal noted that there was no dispute regarding the appellant's eligibility for the refund, and the denial was based on technicalities. It suggested that the Department should conduct an enquiry to verify the contents of the ARE-1 documents from the copies in ARE-2 to resolve the issue effectively.

Another significant point raised was the acknowledgment by the Department that duplicate ARE-2 documents were available in their files, indicating a possibility to examine them for processing the refund claim. The Tribunal emphasized the importance of fair play in legal procedures, stating that when a loss of documents in transit is man-made and beyond the appellant's control, they should not be penalized. Referring to a previous apex court case, the Tribunal highlighted that procedures should not be tyrannical but subordinate to the law. Consequently, the Tribunal remanded the appeal to the Adjudication authority for further enquiry and a fair opportunity for the appellant to present their case before a decision is made.