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TMI Blog2011 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... r proposing to reject the rebate claims. The show cause notice culminated into an order dated 6th July, 2006 rejecting all the nineteen rebate claims on the ground that the Superintendent having jurisdiction over the factory of the manufacturer had not endorsed the ARE-1, as prescribed under the law for claiming rebate of Central Excise duty. Being aggrieved, the petitioner preferred an appeal before the Commissioner (Appeals), Rajkot who by an order dated 30th August, 2006 allowed the appeal holding that substantive compliance regarding export of goods had been fulfilled by the petitioner and the non-endorsement of triplicate copies of ARE-1 by the Superintendent having jurisdiction over the factory of manufacturer does not appear to be a substantive condition for allowing the rebate claim. 3. Against the said order of the Commissioner (Appeals), the Department filed a revision application before the Government of India on the ground that endorsement by the Superintendent having jurisdiction over the factory is an essential and foremost criteria in terms of the instruction for disposal of triplicate copies of ARE-1 and, therefore, the claims of rebate were filed without fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the duty paid records of the manufacturers. It was urged that it is not understood how such an exporter can show to the Department that these invoices relate to these very goods. It was submitted that there is only one duplicate copy of invoices which is relevant either to take credit or to take rebate, which is produced in original. Thus, there is no chance whatsoever of taking double advantage. It was submitted that recognizing these aspects, the Commissioner (Appeals) had allowed the appeal preferred by the petitioner. 4.1 Next, it was submitted that the Superintendent in charge of the manufacturer s unit does not state that the invoices made by the manufacturer are defective in any manner nor is it anyone s case that these invoices are not genuine or that they are false or fraudulent. That the Department itself allowed the manufacturer to clear these packages under such invoices for years and such packages are sold in the local market under similar invoices and that despite years of operation, the Department is not seizing the goods anywhere on even a suggestion that the co-relation between such invoices and the material is not possible. Thus, the manufacturer is allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly duty paid, etc. He is only required to make sure that he knows the address of the manufacturer. Taking of credit and granting of rebate is the same monetary benefit. If the Cenvat rules do not require these aspects to be looked into, it cannot be understood how a purchaser who is exporting the goods is made liable for more stringent conditions. 4.4 Next, it was submitted that the Superintendent having jurisdiction over the factory of the manufacturer is to carry out necessary verification, and has to certify the correctness of duty payment on both triplicate and quadruplicate copies of ARE-1 which are sent to him. Hence, even as per the said prescribed procedure, the Superintendent is not required to identify or co-relate the goods as the goods cleared from the factory of manufacturer are already exported, after identification and verification of co-relation at the end of merchant exporter. The Superintendent in charge of the range in whose jurisdiction, the factory is situated was bound to certify only the correctness of duty payment of triplicate and quadruplicate copies of the ARE-1. It was submitted that the Superintendent has not certified on the ground that it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises and were exported under the Notification No. 40/2001-C.E. (N.T.) read with Circular dated 30th January, 1997. The JRS, AR-V, Jamnagar examined the goods and found that the goods were not sealed (non-containerised cargo) by them at the material time. The goods were subsequently cleared for export through the port of export. During the course of examination, the petitioner submitted duplicate copies of invoices issued by the manufacturer, ARE-1 and copy of invoices of distributors based at Ahmedabad. The duty payment particulars were verified by the JRS, Vadodara (JRS of manufacturer). However, the triplicate copy of ARE-1 was not endorsed by him as there were no identifiable marks to co-relate the goods with the invoices. It was submitted that the endorsement by the Superintendent who checked the stuffing of the containers at Sachana from where exports were to be made cannot be said to have certified the goods to be identified by any mark as required by the said notification. The endorsement would only mean that the goods are the same, which are mentioned in the invoice and that the packing looks original factory packing . However that would not mean that the goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. 5.3 The learned counsel further submitted that the petitioner was obliged to fulfil the requirements prescribed in the notification as explained by the circular and correctly fill up the ARE-1 form (describing the mark identifying the goods) and co-relate the packages of the goods with the invoices to claim rebate. The petitioner having failed to do so, rebate has rightly been denied to it. It was, accordingly, submitted that the petition being devoid of any merit, deserves to be dismissed and does not warrant any intervention by this Court. 6. The case of the respondents as indicated in the show cause notice dated 21st June, 2006 is that by virtue of condition No. 2(a) of the Notification No. 19/2004-C.E. (N.T.), dated 6th September, 2004, as amended, rebate of Central Excise duty paid on excisable goods is allowed subject to the condition that the same should be exported after payment of duty directly from a factory or warehouse, except as otherwise permitted by a general or special order. The C.B.E. C. vide Circular No. 294/10/97-CX, dated 30th January, 1997 in certain cases, allows exportation of the duty paid goods from a place other than a factory or a warehouse, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated hereinabove. Accordingly, as required by the instruction contained in Circular No. 294/1997, the triplicate copies of ARE-1 had not been endorsed by the Range Superintendent of Vadodara having jurisdiction over the factory. Accordingly, the document required for sanctioning rebate is not available with the claimant, that is, triplicate copies of ARE-1s duly endorsed by the Range Superintendent of Vadodara having jurisdiction over the factory of the manufacturer. 7. The adjudicating authority after considering the explanation offered by the petitioner found that in all the nineteen cases, the petitioner/claimant had procured duty paid goods from the distributor of the manufacturer, that is, M/s. Dhariwal Industries Ltd., Vadodara. The claimant prepared export documents including ARE-1, showing details of invoices under which the goods were originally cleared from the factory of manufacturer. The goods were presented before the Central Excise officer having jurisdiction over the storage premises for inspection and examination. The officer had inspected and examined the goods and allowed the export. The officer endorsed the ARE-1 as The goods as shown in ARE-1 is clearly id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the goods were actually exported. The triplicate copies in all 19 cases were sent to the Central Excise officer having jurisdiction over the factory for compliance to certify the correctness of duty payment and endorsement on triplicate copy of ARE-1. The officer had verified the duty payment particulars in respect of goods covered under the invoices mentioned in ARE-1, but denied to endorse the triplicate copy of ARE-1. For not endorsing the ARE-1 the officer had given the reason that it was not possible to correlate between the goods exported and goods cleared by M/s. Dhariwal Industries Ltd. because invoices, as well as ARE-1(s) do not show any special particulars about the goods, that is, Batch No., Mark No. or any other specific marking, from which it can be correlated that the same goods have been exported, which were cleared from the factory. Despite the aforesaid findings recorded by him, the adjudicating authority observed that in all the 19 claims for rebate of duty on goods exported from a place other than factory and warehouse of manufacturer, a prime condition was that the export document, that is, triplicate copies of ARE-1, should be endorsed by the officer hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing unit had complied with the above Circular while endorsing the past export clearances of the petitioner based on similar invoices, there was no valid ground for the Superintendent, Vadodara to refuse to do so in respect of 19 claims and state that he cannot co-relate the export goods with the invoices in the present case. The Commissioner (Appeals) found that there was substantive compliance by the petitioner and was of the view that in the light of the various decisions of the Government of India which are referred to in his order, the non-endorsement of triplicate copy of ARE-1s by the Superintendent, Central Excise, Vadodara under whose jurisdiction the manufacturing unit is located did not appear to be a substantive condition. He, accordingly, allowed the appeal and remanded the matter to the lower authority with a direction to condone the procedural lapse of non-endorsement of triplicate copy of ARE-1 by the Superintendent, Central Excise, Vadodara and sanction the rebate claims based on the verification report of invoices, duty paid particulars received from the said Superintendent, Central Excise. 9. A perusal of the impugned order made by the revisional authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Rules, 2002 read with the provisions of Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and Board s Circular No. 294/10/1997-CX, dated 30-1-1997 are required to be followed. 11. Rule 18 of the Rules, makes provision for rebate of duty and reads thus : Rule 18. Rebate of duty. - Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfilment of such procedure, as may be specified in the notification. In exercise of the powers conferred by Rule 18 of the Rules, the Central Government has issued Notification : 19/2004-C.E. (N.T.), dated 6th September, 2004 granting rebate of the whole of the duty paid on all excisable goods falling in the First Schedule to the Central Excise Tariff Act, 1985 exported to any country other than Nepal and Bhutan, subject to the conditions, limitations and procedure specified thereunder. Under Condition 2(a) thereof, it is provided, that the excisable goods shall be exported after payment of duty, dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty paying document prescribed under Rule 52A under which the excisable goods are cleared from the factory and the quantity cleared. (Photo copy of invoice/duty paying documents can be submitted). 5. (e) The rate of duty and the amount of duty paid on excisable goods. 8.2 The AR form should have a progressive number commencing with Sl. No. 1 for each financial year in respect of each exporter with a distinguishing mark. Separate form should be made use of for export of packages/consignments cleared from the same factory/warehouse under different invoices or from the different factories/warehouses. On each such form it should be indicated prominently that the goods are for export under claim of rebate of duty. 8.3 On receipt of the above application and particulars, the particulars of the packages/goods lying stored should be verified with the particulars given in the application and the AR-4 form, in such manner and according to such procedure as may be prescribed by the Commissioner. 8.4 If the Central Excise Office deputed for verification of the goods for export is satisfied about the identity of the goods, its duty paid character and all other particulars give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner may in any particular case allow, and the claim for rebate, together with the proof of due exportation is filed with the Assistant Commissioner of Central Excise before the expiry of the period specified in Section 11B of the Central Excise Act, 1944. 8.8 The rebate will be sanctioned, if admissible otherwise, after following the usual procedure. 11. On a bare reading of the above referred provisions, it is apparent that in case where goods are exported otherwise than by way of direct exports from factory/warehouse, the exporters are required to follow the procedure as laid down under paragraph 8 of the above Circular. Paragraph 8.4 of the said Circular lays down that if the Central Excise officer deputed for verification of the goods for export is satisfied about the identity of the goods, its duty paid character and all other particulars given by the exporter in his application and AR-4, he should endorse such forms and permit the export. Thus, it is apparent that the stage for verification of identity of the goods and its duty paid character and all other particulars is at the stage prior to the export of the goods. This presumably is because the identity of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R-4. The said condition does not impose any obligation upon the said Superintendent to co-relate between the goods exported and the goods cleared from the factory of the manufacturer. In the circumstances, the Superintendent having the jurisdiction over the factory of the manufacturer was not required to examine as to whether there was any co-relation between the goods exported and the goods cleared by the manufacturer and as to whether the ARE-1s showed any special particulars about the goods, viz., batch number, mark number or any other specific marking from which it can be co-related that the same goods had been exported, which were cleared from the factory. This co-relation is the obligation imposed upon the Central Excise officer having jurisdiction over the storage premises of the petitioner prior to the export of the goods in question. In the circumstances, there being no requirement for the Superintendent in charge of the Range under whose jurisdiction the factory of the manufacturer is situated to co-relate between the goods exported and the goods cleared by the manufacturer, he could not have refused to endorse the ARE-1s on this ground. 14. The revisional authority in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Agency, Ahmedabad and M/s. Sojas Corporation, Ahmedabad under cover of bills/invoices containing the details of goods viz., description, quantity, value of goods, by the C F agent of the manufacturer; the petitioner procured the goods from the said distributors; at the time of procurement of the said goods, the certificate to the effect that the goods manufactured by M/s. Dhariwal Industries Ltd., Vadodara also contained other details such as bill number, GP number, description of goods, quantity of goods, assessable value at the time of clearance of goods from the factory, rate of duty, total excise duty paid, registration number of the manufacturer, duty debited particulars in PLA register and the said goods were sold under Distributor s Bill No. and date, issued by the said distributors; the said certificate was also accompanied by duplicate copy of manufacturer s invoices and disclaimer certificate issued by the distributors that they have no objection if rebate is paid to the petitioner. Thus, the petitioner procured the goods in question from distributors and stored the same in its premises in originally factory packed condition. The petitioner prepared ARE-1s incorpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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