2019 (1) TMI 910 - HC - Central Excise

Rectification of Mistake - the Tribunal held that order-in-original dated 27.2.2014 cannot be sustained for the reasons recorded in the order, however, in the interest of public exchequer, the Tribunal chose it fit to remand the matter to the authorities to ascertain as to whether Village Antalia where the premises of the appellant is located was falling under the rural area so as to be eligible and justified in adopting the procedure and seeking exemption - Held that - The plain and simple reading not only of the order impugned in the appeal proceedings dated 13.10.2015 but the order passed in rectification of mistake application dated 29.4.2016 would also clearly indicate that the Tribunal proceeded on the clear aspect as canvassed and not disputed by the authorities that the goods have actually been exported. The circular and the notification pressed into service unequivocally indicate that the petitioner would be entitled to exemption based upon the location of the manufacturing unit of the petitioner in which the specified goods were manufactured, and in the proceedings of Special Civil Application, when the competent authority has placed on record in unequivocal terms the aspect that the petitioner s unit is located in rural area or is not located in the area which is prescribed in urban or mentioned areas then the entire controversy should rest and need not be probed further as would otherwise amounting to creating further complication, and thus, this court is of the considered view that the Tribunal also having recorded the unequivocal submission of the authorities qua the actual physical export and when having recorded its finding regarding unsustainability of the order-in-original dated 27.2.2014 the remanding of the matter in facile ground of public exchequer leaves much room to the comment upon. Suffice it to say that the said ground did not warrant in remanding of the matter and hence we are of the view that the said order itself was not sustainable and requires to be quashed and set aside - petition disposed off.

Summary

Issues Involved:
1. Challenge to the orders passed by the Customs, Excise, and Service Tax Appellate Tribunal dated 13.10.2015 and 29.4.2016.
2. Eligibility for exemption based on the location of the manufacturing unit.
3. Compliance with procedures for export of excisable goods under Rule 18/Rule 19 of the Central Excise Rules, 2002.
4. Legality and justification of demands of duty, fine, and penalty confirmed by the adjudicating authority.
5. Applicability of simplified export procedures to the appellants.

Detailed Analysis:

1. Challenge to the Orders Passed by the Tribunal:
The appellants challenged the Tribunal's orders dated 13.10.2015 and 29.4.2016. The Tribunal had remanded the matter to the authorities to ascertain whether Village 'Antalia,' where the appellant's premises are located, falls under a rural area for eligibility and justification in adopting the procedure and seeking exemption. The appellants perceived this remand as erroneous since the factum of actual export was not disputed, and thus, they filed a Rectification of Mistake Application, which was rejected, leading to the filing of the Special Civil Application.

2. Eligibility for Exemption Based on the Location of the Manufacturing Unit:
The appellants argued that their manufacturing unit is situated in Village 'Antalia,' Billimora, District Navsari, Gujarat, and primarily engaged in exporting readymade garments. They contended that they are an SSI Unit and thus eligible for exemption from following the procedure for export of excisable goods under Notification No. 42/2002-CE(NT) dated 26.6.2001, as per Board Circulars. The Tribunal's remand to verify the rural status of 'Antalia' was challenged since the location was not disputed and supported by affidavits and certificates from local authorities.

3. Compliance with Procedures for Export of Excisable Goods:
The appellants claimed they were not required to follow the standard export procedures due to their SSI status and the nature of their exports. They relied on Circular No. 705/21/2003-CX dated 08.04.2003, which extended simplified procedures to readymade garment exporters. The adjudicating authority had denied this benefit, asserting that the appellants were not entitled to SSI exemption under Notification No. 8/2003-CE dated 01.03.2003 because they were manufacturing branded garments. The appellants argued that their compliance with simplified procedures was sufficient and aligned with the Board's circulars.

4. Legality and Justification of Demands of Duty, Fine, and Penalty:
The adjudicating authority had confirmed the demand of duty with interest and imposed penalty and redemption fine on the appellants for not following the prescribed procedures. The appellants contended that the Tribunal had already found the order-in-original dated 27.2.2014 unsustainable, and thus, the remand was unnecessary. They argued that the actual export was not disputed, and the simplified procedures should apply, making the demands and penalties unjustified.

5. Applicability of Simplified Export Procedures:
The appellants emphasized that the simplified export procedures outlined in Circular No. 705/21/2003-CX dated 08.04.2003 should apply to their case. This circular allowed exempted units to clear goods on invoices instead of regular ARE-1 forms and maintain simple records. The Tribunal had acknowledged the actual export and compliance with the simplified procedures, yet remanded the matter, which the appellants argued was unwarranted.

Conclusion:
The High Court quashed and set aside the Tribunal's orders dated 13.10.2015 and 29.4.2016. The Court noted that the actual export was not disputed and that the simplified export procedures should apply to the appellants. The remand by the Tribunal was deemed unnecessary and erroneous. The Court ruled in favor of the appellants, stating that the demands of duty, fine, and penalty were unjustified, and the simplified procedures were applicable based on the location of the manufacturing unit in a rural area. The Special Civil Application and tax appeal were disposed of, making the rule absolute with no order as to costs.