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TMI Blog2013 (8) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... l factual backdrop cannot also be lightly discarded. However, the above rejection of the petitioner’s revision application under Section 35EE being only on the ground of limitation and not on merits, the arguments against merger thereof with the order of the Commissioner (Appeals), Jaipur has substance. Proof of Export - Duty Demand u/s 11A - Interest u/s 11AB and Penalty - Assesse submitted the proof of export before the authority for acceptance under the provision of the Rules and the authority had accepted the same - authority withdrew the acceptance of the proof of export covering the consignments - Held that:- The action of the authorities on the ground of misdescription of the goods by the petitioner, on a cumulative consideration cannot be construed to be untenable - The relief claimed by the petitioner was statutory in nature and would be logically available to it on strict compliance of the prescriptions in connection therewith - The mere contingency that at some earlier point of time, the acceptance of the proof of export had been issued by the concerned excise authorities would not entitle it to the benefit of Rule 19. The present determination had been based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents. 3. In the outlined backdrop of the instant scrutiny, the facts in bare essential, would only be scripted as the determination of the debate involved, would logically eventuate in the resultant legal consequences, even in absence of specific references to all the impugned orders involved. 4. The petitioner has introduced itself to be a manufacturer of Menthol Powder, Menthol Crystal, D.M.O. and Menthol Oil falling under Headings No. 2906 11 00, 3003 90 21 and 3301 25 90 of the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as CETA ) and engaged in exporting them without payment of duty under Rule 19 of the Rules. Between October, 2005 to April, 2006, it accordingly, cleared six consignments covered by ARE-1 Nos. KAIZEN/05-06/20, dated 31-10-2005, KAIZEN/05-06/23, dated 22-12-2005, KAIZEN/05-06/29, dated 7-3-2006, KAIZEN/05-06/30, dated 18-3-2006, KAIZEN/06-07/1, dated 22-4-2006 and KAIZEN/06-07/3, dated 28-4-2006 for export under the letter of undertaking submitted to the jurisdictional Assistant Commissioner, Central Excise, Division-II, Jaipur. It also submitted the proof of export before the said authority for acceptance under the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, as it admittedly did not have a drug licence to manufacture those mentioned in their Bill of Lading/Shipping Bills, it was apparent that those had not been manufactured by it, and thus it, under the guise of export, diverted the same, valued Rs. 4,27,29,663/-, in the local market with an intention to evade central excise duty. The petitioner/assessee was also required to produce all evidence, documentary or otherwise, at the time of submission of its explanation in support of its defence. 5. The petitioner, on 14-12-2006, submitted its reply to the show cause notice maintaining that it had actually exported the goods covered by ARE-1s, after the acceptance of proof thereof by the jurisdictional Assistant Commissioner, Central Excise, Division-II, Jaipur. It asserted that the exported consignments were of Menthol Powder which had been cleared under the respective ARE-1s. It admitted that it did not hold the drug licence for the manufacture of Menthol Powder as per any pharmacopoeia standards, either British or United States. While pointing out the admission of the Revenue in the show cause notice of the actual export of the consignments involved, the petitioner/assessee maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned revisional authority ought to have adjudicated its application under Section 35EE on merits, the petitioner has sought the remedial intervention of this Court. 7. The respondents have in their reply reiterated their stand in the show cause notice. According to them, not only such mismatch, in the description of goods in the AREs and other documents, in the six consignments of Menthol Crystal had been detected, it is also writ large on the face of the contemporaneous documents, that such anomalies have been noticed in other instances covered by ARE-1s No. 29 dated 7-3-2006, 30 dated 18-3-2006, 01 dated 22-4-2006 and 03 dated 28-4-2006 of the petitioner s goods cleared as being organic chemicals of Chapter-29, whereas the goods exported were pharmacopoeia products of Chapter 30 of the Schedule to the CETA. While reiterating that Menthol Powder with pharmacopoeia standards as IP (Indian Pharmacopoeia), BP (British Pharmacopoeia) and USP (United States Pharmacopoeia) is a drug for which licence under the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder, is an absolute essentiality, it has asserted the acceptance of proof of export had been validly withdrawn. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest and penalty being patently illegal and in contravention of the letter and spirit of the Act and the Rules ought to be adjudged null and void. As the petitioner s consignments had been exported after being cleared by the customs authorities, the purported difference in the description thereof as depicted in the AREs and the other documents pertaining thereto, notwithstanding, being satisfied that the said variations were neither material nor did have any bearing on the identification of the goods, the respondents were estopped in law from referring to the impugned actions, he urged. 9. According to Mr. Devnath, in absence of any evidence of diversion of the petitioner s consignments to the domestic market, and in the face of the admitted factum of export thereof, absence of any drug licence of the petitioner to manufacture the same products with pharmacopoeia standards did not, by any means, signify any attempt on its part to export goods not manufactured by it for evading central excise duty. The learned counsel, therefore, has insisted that the withdrawal of the proof of export and the proceedings initiated by the show cause notice dated 27-10-2006 ought to be declared nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 35EE had been rejected. 13. Indubitably, by the time it filed its revision petition under Section 35EE, not only the period of limitation prescribed therefor had expired but also the term of relaxation grantable had lapsed. The power of the High Court to condone the delay in presentation of reference application under the unamended Section 35H(1) of the Act beyond the prescribed time by applying Section 5 of the Limitation Act, 1963 was dilated upon in Hongo India (P) Ltd. (supra). Their Lordships of the Supreme Court, on an elaborate survey of the provisions of the Act, with particular reference to Sections 35, 35B, 35EE, 35G and 35H, in authoritative terms, concluded that the scheme thereof predicated complete exclusion of Section 5 of the Limitation Act. In doing so, not only the decisions suggesting a different approach vis- -vis other enactments were clearly distinguished in the face of the framework of the Act, it sustained the verdict of the jurisdictional High Court sharing the same view against its power to condone the delay after the expiry of the period prescribed by the relevant provisions of the Act. Their Lordships, with reference to Section 29 of the Limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Limited (supra), as the text of that decision would reveal, the assessee was left at liberty to avail the remedy under Section 35G of the Act and to seek the benefit of Section 14 of the Limitation Act, 1963 in accordance with law. So far as the aspect of the limitation is concerned, this decision as such therefore does not enunciate a legal proposition of application of Section 14 of the Limitation Act, 1963 in the eventualities contemplated by the various provisions of the Act and, in particular, Sections 35, 35B, 35EE, 35G and 35H of the Act. Not only, to reiterate, in Hongo India (P) Ltd. (supra), the scheme of the Act was distinguished from that of the Act, 1996, while examining the applicability of the provisions of the Limitation Act, 1963 enlarging the period of limitation by the latter for preferring appeal/revision/reference thereunder, going by the coram thereof as well, according to us, this verdict is of decisive relevance. We are therefore left unpersuaded by the petitioner s plea for condonation of delay on the ground of its bona fide litigating before a wrong forum. The assertion of the respondents to the effect that in the other accompanying instances, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptance of the proof of export had been issued by the authorities and the same had been cleared for export after examination of the same at the place of export as required by CBEC guidelines to ascertain the identity and the quantity thereof. Though the respondents have not refuted the petitioner s plea of its goods having been subjected to such scrutiny, its explanation that the misdescription was a result of some inadvertent mistake, lacks in persuasion, more particularly, in view of its knowledge of not being the manufacturer of Menthol Crystal/Powder with pharmacopoeia standards as entered in its documents, namely Bill of Lading and Shipping Bills and thus, not being entitled to avail the benefit of central excise tax exemption under Rule 19 for exporting the same. Absence of any evidence for the diversion of these goods to the domestic market, ipso facto, in our estimate, does not, in the wake of apparent misdescription thereof, entitle it to the benefit of Rule 19 of the Rules. Having regard to the underlying purpose of the incentive as envisaged in this provision, the producer or manufacture ought to be adjudged to be eligible strictly in terms of the prescriptions thereo ..... 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