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TMI Blog2018 (12) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... may be allowed, in so far as the procedure through which the required conditions are to be fulfilled to claim rebate/exemption. In the present case, on the face of Rule 18, which specifies precondition for grant of rebate, it should also be held to be mandatory - If the Rule itself requires the fulfillment of precondition for grant of rebate, it would amount to doing violence to the plain language of the statute to hold otherwise that fulfillment of requirements would not be a mandatory precondition. Ordinarily, the requirements of fulfillment of preconditions as stated in Rule 18 read with relevant notification, as mandated are required to be fulfilled to avail rebate. However, in exceptional cases it is open for the assessee to prove claim of rebate by leading other collateral documentary evidence in support of entitlement of rebate - where an assessee seeks to establish claim for rebate without ARE-1 document or for that matter without submission of those documents which are specified in relevant notifications he is required to clearly state as to what was that reason beyond his control due to which he could not obtain ARE-1 document. The submission of ARE-1 document wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour. Learned single Judge, referring to Rule 18 of Rules, 2002 and the relevant notification as also judgment of the Supreme Court in N. Ambalal (supra) held that the precondition to seek rebate was of mandatory nature and non submission of the same render the claim for rebate is liable to be rejected. 5. Learned counsel appearing for the appellant, relying upon ( Government of India Others Vs. Indian Tobacco Association reported in AIR 2005 SC 3685 ; Formica India Division Others Vs. Collector of Central Excise Others r eported in 1995 Supp (3) SCC 552; Mangalore Chemicals and Fertilisers Ltd. Vs. Deputy Commissioner of Commercial Taxes and Others reported in AIR 1992 SC 152; Union of India Vs. Bharat Aluminium Co. reported in 2011 (263) ELT 48 (Chhattisgarh); Zandu chemicals Limited Vs. Union of India reported in 2015 (315) ELT 520 (Bom.) ; Union of India Vs. Farheen Texturisers reported in 2015 (323) ELT 104 (Bom.); Tablets India Ltd. Vs. Jt. Secy, GOI [2010(259) ELT 191 (Mad.)] Raj Petro Specialties Vs. Union of India Others reported in 2017 (345) elt 496 (Guj.) and UM Cables Limited Vs. Union of India Others reported in 2013 (293)ELT 641 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAFM- 750505052 dated 04.02.2008 and SAFM 750549328 dated 25.03.2008. (4) Bank Realization Certificate. (5) Disclaimer Certificate. All the authorities while scrutinizing the claim of the appellant took the view that on account of non-production of ARE-1 document and other evidence of duty paid export being not reliable, claim is liable to be rejected. 8. In so far as the requirement of submission of ARE-1 document is concerned, it is required to be examined whether the said requirement is substantive as to make it mandatory and non-compliance thereof fatal to the claim for rebate or a directory so that in appropriate case, it may be held to be open for the assessee to claim rebate by producing other collateral documentary evidence of duty paid goods exported by him through various modes of export. 9. The claim of rebate in cases of Export is governed by the provisions contained in Rule 18 of the Central Excise Rules, 2002 which provides for rebate of duty and reads thus: 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 the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted rebate of the whole of the duty paid on all excisable goods falling under the first schedule to the Central Excise Tariff Act, 1985 (5 of 1986), exported to any country other than Nepal and Bhutan, subject to the conditions limitations and procedures specified in the notification. Therefore, the substantive part of the provision relating to entitlement to grant of rebate provides that rebate of all the duty to be paid to certain category of certain excisable goods would be available if they are exported, excluding two countries. The substantive law with regard to entitlement is therefore mandatory and no rebate would be available under the law unless goods are exported. Secondly, rebate would be available only on certain category of excisable goods and not on all. This part of the notification constitutes a mandatory requirement. The notification in clause 3 thereof, lays down the procedure for filing of rebate claims. It includes various documents which are required to be submitted along with rebate claims. We however, find that under Rule 18,2 grant of rebate is subject not only to conditions of rebate but also subject to fulfillment of procedure specified in the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to the benefit of notification without insisting on technical consequences of Rule 56 A of the Central Excise Rules, 1944. Strong reliance is placed on the decision in the case of Mangalore Chemicals Fertilizers Ltd. Vs. Deputy Commissioner of Commercial Taxes and Others reported in AIR 1992 SC 152 as in that judgment the court was considering the provisions relating to admissibility of the benefits of exemption. The question which fell for consideration was as below : Appellant, it is not in dispute, had the necessary eligibility under the original exemption notification of 1969. The controversy is confined only to the question of the manner of effectuating the refund of sales tax that appellant, admittedly, was entitled to. 16. While deciding the issue as to whether the provision was mandatory or directory, their Lordships examined the legal position keeping in view the law laid down in the earlier decision in the case of Kedarnath Jute Manufacturing Co. Vs. Commercial Tax Officer, Calcutta reported in 1965 (3) SCR 626 and held thus: 11. We have given our careful consideration to these submissions. We are afraid the stand of the Revenue suffers from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other relevant provisions. When a notification is issued in accordance with power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is as if it were contained in the Act itself. See in this connection the observations of this Court in Orient Weaving Mills (P) Ltd. v. Union of India. See also Kailash Nath v. State of U.P. The principle is well settled that when two views of a notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. But in this connection, it is well to remember the observations of the Judicial Committee in Coroline M. Armytage v. Frederick Wilkinson that it is only, however, in the event of there being a real difficulty in ascertaining the meaning of a particular enactment that the question of strictness or of liberality of construction arises. The Judicial Committee reiterated in the said decision at p. 369 of the report that in a taxing Act provisions establishing (sic enacting) an exception to the general rule of taxation are to be construed strictly against those who invoke its benefit. While interpreting an exemption clause, libe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods. Similarly, details are provided in regard to the value, duty, the number and date of invoice and the amount of rebate claimed. Part A contains a certification by the central excise officer to the effect inter alia that duty has been paid on the goods and that the goods have been examined. Part B contains a certification by the officer of the customs of the shipment of the goods under his supervision. 15. In the situation in the two writ petitions, the rebate claims that were filed by the Petitioner would have to be duly bifurcated. As noted earlier the first writ petition3 relates to two claims dated 20 March 2009 and 8 April 2009 in the total value of ₹ 12.54 lacs. In respect of the second of those claims dated 8 April 2009, of a value of ₹ 10.08 lacs, the Petitioner has averred that the goods were loaded by the Shipping Line on the vessel and the vessel sailed on 18 April 2008 whereas the Let Export Order was passed by the customs authorities on 19 April 2008. The Petitioner has stated that in view of this position the customs authorities withheld the endorsement of the ARE-1 forms and the issuance of the export promotion copy of the shipping bill 4. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in the case of beneficial and promotional exemption is liberal interpretation. 19. In the present case, what we find is that while rebates can be allowed only when it is proved by the assessee that he has paid the duty on goods exported and the goods are those specified in the provision itself, it is necessary to fulfill preconditions to avail rebate by furnishing documents which are enumerated in the notification. 20. At this juncture, we must give our anxious consideration to the submissions made by the counsel for the revenue that there is definite purpose behind requirement of submission of ARE-1 document and it takes care of due and proper certification by excise authorities, custom authorities and postmasters with regard to the fact of goods being duty paid and actually exported. We cannot be oblivious to the submissions and the purpose behind submission of ARE-1 document. Ordinarily the assessee in order to claim rebate has to prove his entitlement by submission of the documents which are enumerated in the notification which includes ARE-1 document also. 21. Under instructions contained in Chapter 8 under the heading 'export under claim for rebate' of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure of verification cumbersome but may also adversely affect efficiency of the working of the whole mechanism of decision on rebate applications. 24. Upon such consideration we are, therefore, inclined to hold that ordinarily, the requirements of fulfillment of preconditions as stated in Rule 18 read with relevant notification, as mandated are required to be fulfilled to avail rebate. However, in exceptional cases it is open for the assessee to prove claim of rebate by leading other collateral documentary evidence in support of entitlement of rebate. As we have noticed, it would only be an exception to the general rule and not a choice of the assessee to either submit ARE-1 document or to lead collateral documentary evidence. We would further hold that where an assessee seeks to establish claim for rebate without ARE-1 document or for that matter without submission of those documents which are specified in relevant notifications he is required to clearly state as to what was that reason beyond his control due to which he could not obtain ARE-1 document. In cases of the nature as was noticed in the decision of U.M. Cables Limited, the assessee would be required to file at leas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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