2012 (10) TMI 687 - CGOVT - Central Excise

Government directs verification for rebate claims based on modified orders.

The Government modified the impugned orders and directed the original authority to conduct necessary verifications regarding the relevant dates and the ... Statutory requirement of submission of original and duplicate ARE-1 for rebate claims - computation of limitation under Section 11B from the date ship leaves India - rebuttal of treating non-submission of ARE-1 as a mere procedural/technical lapse - verification of shipping documents (EGMs/Shipping Bills) as determinative of relevant dateStatutory requirement of submission of original and duplicate ARE-1 for rebate claims - Whether rebate claims are admissible in absence of duly endorsed original and duplicate copies of ARE-1 - HELD THAT: - Government held that submission of original and duplicate ARE-1, duly endorsed by Central Excise and Customs, is an essential statutory requirement for rebate claims under Rule 18/Notification No.19/04-C.E. (N.T.). The ARE-1 is the basic export document that establishes that the goods cleared from the factory were actually exported and prevents double claims; there is no provision in the export rebate procedure to dispense with this requirement. Reliance on principles distinguishing minor/technical lapses was rejected where non-compliance may lead to specific consequences (possible fraud or double benefit). Photocopies cannot substitute for originals as secondary evidence where comparison with originals is not possible. Consequently, rebate claims are not admissible in the absence of original and duplicate ARE-1s except where those originals are in fact produced and accepted. [Paras 9, 10]Non submission of original and duplicate ARE 1 renders the rebate claim inadmissible; the two claims accompanied by original and duplicate ARE 1 may be sanctioned if otherwise in order.Computation of limitation under Section 11B from the date ship leaves India - verification of shipping documents (EGMs/Shipping Bills) as determinative of relevant date - Determination of the relevant date from which the one year limitation under Section 11B is to be computed and whether the rebate claims are time barred - HELD THAT: - Government observed that under Section 11B the one year period is to be computed from the relevant date, and where goods are exported by sea the relevant date is the date on which the ship in which such goods are loaded leaves India. The exact sailing/export dates were disputed and are not established on the record; therefore those dates must be reconfirmed from primary export records such as EGMs and Shipping Bills. Where documentary verification shows the relevant date falls within one year of filing, the claim is not time barred. The third rebate claim, rejected as time barred, requires such verification; if the verified relevant date is 8 6 08 the claim filed within one year must be allowed in accordance with law. [Paras 11, 12]The relevant date for limitation is the ship's sailing date; where that date is disputed the matter is remanded for verification from EGMs/Shipping Bills and, if confirmed within one year, the rebate claim is to be sanctioned.Rebuttal of treating non-submission of ARE-1 as a mere procedural/technical lapse - Whether non submission of ARE 1 can be treated as a condonable procedural lapse entitling grant of rebate - HELD THAT: - Government rejected the contention that non submission of original/duplicate ARE 1 is merely a technical or procedural lapse to be condoned. The decision reasons that acceptance of photocopies or overlooking the statutory requirement would enable possible fraud or double benefits and thus cannot be treated leniently. Precedents and earlier Government orders were noted to support strict compliance with the statutory requirement for rebate claims. [Paras 10]Non submission of original/duplicate ARE 1 is not to be treated as a minor procedural lapse; strict compliance is required and rebate cannot be granted in its absence.Verification of shipping documents (EGMs/Shipping Bills) as determinative of relevant date - Whether specific rebate claims which were returned and later re submitted should be considered as originally filed on the earlier date or as filed on the later date of re submission - HELD THAT: - Government directed that where a claim was initially filed but returned for defects and later re submitted after removal of defects (production of Shipping Bills), the exact filing date and whether the initial filing is to be treated as effective for limitation purposes requires verification of the record and application of law. The Government noted the applicant's contention that initial filing on 21 8 08 followed by resubmission on 3 6 09 should be treated as within time if the relevant date of export is verified accordingly; such matters were to be examined by the original authority. [Paras 11, 12]Claims returned for defects and later re submitted must be examined with reference to the record; verification of export/shipping dates and filing chronology is to be undertaken by the original authority to determine whether the claim is within the one year period.Final Conclusion: Revision applications were partly allowed: the Government upheld that original and duplicate ARE 1 are an essential statutory requirement and rebate is not admissible without them, but directed that rebate claims accompanied by original ARE 1s (notably ARE 1 Nos. 16 and 25) may be sanctioned if in order; further, issues as to the relevant date for computation of limitation and the verification of shipping/filing records for certain claims are remanded to the original authority for verification and fresh decision in accordance with the observations made. Issues Involved:1. Rejection of rebate claims due to non-filing of original and duplicate copies of ARE-1 forms.2. Determination of the 'relevant date' for calculating the limitation period for filing rebate claims under Section 11B of the Central Excise Act, 1944.3. Procedural lapses and their impact on the admissibility of rebate claims.4. Rejection of rebate claims on the basis of being time-barred.Issue-wise Detailed Analysis:1. Rejection of Rebate Claims Due to Non-Filing of Original and Duplicate Copies of ARE-1 Forms:The applicant contested that the non-submission of original and duplicate copies of ARE-1 forms should not lead to the rejection of rebate claims as it is a procedural requirement. They argued that the actual export of goods was proved beyond doubt through other export documents and Xerox copies of the ARE-1s. However, the Government emphasized that the submission of ARE-1 forms is a statutory requirement under Notification No. 19/04-C.E. (N.T.), dated 6-9-04 and the CBEC Manual of Supplementary Instructions. The Government held that non-submission of these forms cannot be treated as a minor procedural lapse and rebate claims cannot be sanctioned without them. The decision was supported by previous orders and the Supreme Court's ruling in J. Yashoda v. K. Shobha Rani, which upheld the necessity of original documents for secondary evidence.2. Determination of the 'Relevant Date' for Calculating the Limitation Period:The applicant argued that the relevant date for calculating the limitation period should be the date on which the ship carrying the goods leaves India. They cited Section 11B(5) of the Central Excise Act, 1944, which defines the 'relevant date' as the date on which the ship or aircraft in which the goods are loaded leaves India. The Government noted that the exact dates of the ships leaving Indian ports were not clear and needed to be re-confirmed from the respective EGMs and Shipping Bills. The Government directed the original authority to verify these dates and, if confirmed, to sanction the rebate claims accordingly.3. Procedural Lapses and Their Impact on the Admissibility of Rebate Claims:The applicant claimed that procedural lapses, such as the delay in filing rebate claims due to the customs department's delay in printing shipping bills, should not deny them the substantive benefit of rebate. They cited various judgments supporting the view that procedural lapses should not defeat the purpose of export-oriented schemes. The Government, however, held that the requirement of submitting original and duplicate ARE-1 forms is a statutory condition and not merely a procedural formality. The Government emphasized that leniency in this requirement could lead to potential fraud and double benefits, which is against the policy of the Government.4. Rejection of Rebate Claims on the Basis of Being Time-Barred:The applicant argued that their rebate claims were filed within the stipulated period of one year from the relevant date, considering the date of export as the date the ship left India. They provided specific dates and claimed that their submissions were within the time limit. The Government noted that the rebate claim of Rs. 32,28,131/- was initially filed on 21-8-08 but was returned due to non-submission of relevant shipping bills. The applicant resubmitted the claim on 3-6-09, and if the relevant date is confirmed as 8-6-08, the claim would not be time-barred. The Government directed the original authority to verify the relevant dates and decide the rebate claims accordingly.Conclusion:The Government modified the impugned orders and directed the original authority to conduct necessary verifications regarding the relevant dates and the submission of original and duplicate ARE-1 forms. The rebate claims should be decided based on these verifications and in accordance with the law. All three revision applications were disposed of in these terms.