2018 (2) TMI 362 - AT - Central Excise

Penalty u/r 27 of CER 2002 - Delay in submitting ARE-1 Applications against export of goods - contravention of Rule 19 of CER 2002 - Held that - there is no dispute or allegation that Appellant had not effected the export or not met with essential conditions as enumerated under N/N. 42/2001-CE(N.T.) dated 26.06.2001. The case is limited to the extent that Appellant could not file the ARE-1 Applications within 24 hours of removal of goods. The delay occurred, owning to the reason that concerned employee met with road accident. However, the said ARE-1 Applications were filed on 30.12.2013 as soon as said employee resumed his duty. The delay caused is nothing but procedural irregularity. The Appellant is not a habitual offender as there has been no delay in filing the application prior to aforesaid period (December, 2013) or post to the aforesaid period - penalty cannot be levied. Appeal allowed - decided in favor of appellant.

Issues:
1. Compliance with Notification No. 42/2001-CE(N.T.) dated 26.06.2001 for self-sealing and self-certification procedure.
2. Delay in filing ARE-1 Applications within 24 hours of goods removal leading to penalty imposition under Rule 27 of Central Excise Rules, 2002.

Compliance with Notification No. 42/2001-CE(N.T.) dated 26.06.2001:
The case involved M/s SMC Pneumatics (India) Pvt. Ltd., engaged in manufacturing excisable goods and exporting under self-sealing and self-certification procedure as per the notification. The notification requires certification by authorized personnel upon goods sealing and timely submission of application copies to the Central Excise authorities. The Appellant was registered with the Central Excise Department and had been complying with the notification's provisions.

Delay in filing ARE-1 Applications:
In December 2013, the Appellant faced a procedural irregularity where 16 ARE-1 Applications were filed beyond the 24-hour period, resulting in Show Cause Notices and subsequent penalty imposition under Rule 27 of Central Excise Rules, 2002. The delay was attributed to an employee's road accident, causing the late submission. The Adjudicating Authority imposed a penalty of INR 5,000 for each Show Cause Notice, which the Appellant challenged before the Commissioner (Appeals).

Analysis of the Judgment:
The Tribunal considered the arguments presented by both parties. The Appellant contended that despite the delay in filing the ARE-1 Applications, all essential export conditions were met, and the delay was due to a genuine reason of the employee's accident. The Appellant requested the condonation of the delay and the setting aside of the penalties. The Departmental Representative relied on the impugned Order upholding the penalties.

Decision and Rationale:
After evaluating the contentions and examining the records, the Tribunal noted that the Appellant had complied with the essential export conditions specified in the notification. The delay in filing the ARE-1 Applications within 24 hours was attributed to a genuine reason, the employee's accident, and the applications were promptly submitted once the employee resumed duty. The Tribunal considered the delay as a procedural irregularity and observed that the Appellant was not a habitual offender. Consequently, the Tribunal allowed the appeal filed by M/s SMC Pneumatics (India) Pvt. Ltd., setting aside the penalties imposed and entitling the Appellant to consequential benefits as per the law.

Conclusion:
The judgment focused on the Appellant's compliance with the notification requirements and the justification for the delay in filing the ARE-1 Applications. By recognizing the genuine reason for the delay and the Appellant's overall adherence to the export conditions, the Tribunal overturned the penalties, emphasizing the procedural irregularity nature of the delay. The decision highlighted the importance of considering specific circumstances in penalty imposition cases and ensuring fair treatment based on the facts presented.

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