2013 (8) TMI 613 - CGOVT - Central Excise

Government denies refund claim due to failure to meet Central Excise Rules for rebate.

IN RE : AMIRA TANNA INDUSTRIES PVT. LTD.

The Government rejected the refund claim as the applicant failed to satisfy the requirements for claiming a rebate under the Central Excise Rules. The ... Refund Claim – Notification No.19/2004 - 100% EOU - Export of goods after clearance to DTA - The assesse had filed the application for refund on the ground that the product Sesame seeds were exempted in DTA and subsequently claim the refund on the ground that the goods cleared in DTA were ultimately exported - Held that:- The goods exported cannot be correlated with goods cleared in DTA - the duty paid on goods exported was not proved - the fundamental requirement of export of duty paid goods was not satisfied the rebate claim was not admissible to the assesse under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004 - J. Yashoda v. Shobha Rani [2007 (4) TMI 11 - SUPREME COURT OF INDIA ] - Non-preparation of statutory document and not following the basic procedure of export goods as discussed above, cannot be treated as just a minor/technical procedural lapse for the purpose of granting rebate of duty on the materials used in the manufacture of impugned exported goods – Order set aside. Issues Involved:1. Time-barred claim.2. Legality of duty payment and refund eligibility.3. Submission of required export documentation.4. Correlation of goods cleared and exported.5. Submission of no objection certificates from merchant exporters.6. Procedural compliance for export under Notification No. 19/2004-C.E. (N.T.).Detailed Analysis:1. Time-barred Claim:The lower authority rejected a portion of the refund claim amounting to Rs. 1,33,911/- as it was deemed time-barred. This decision was based on the stipulations of Section 11B(1) of the Central Excise Act, 1944, which imposes a limitation period for filing refund claims.2. Legality of Duty Payment and Refund Eligibility:The applicant paid duty under Notification No. 23/2003-C.E., dated 31-3-2003, and the lower authority held that the refund of this duty does not arise. The Commissioner (Appeals) partially upheld this view by rejecting the refund claim up to Rs. 6,68,575/- for duty payable on sesame seeds cleared in the Domestic Tariff Area (DTA). The Commissioner also ordered the refund of Rs. 42,581/- for duty paid on waste, with Rs. 5,748/- hit by limitation and Rs. 36,833/- credited to the Consumer Welfare Fund as per Section 11B(2) of the Central Excise Act, 1944.3. Submission of Required Export Documentation:The applicant failed to produce ARE-1 or ARE-2 forms along with invoices evidencing the export of goods. The Commissioner (Appeals) allowed the appeal by considering 'H' form as proof of export, citing precedents where collateral evidence was accepted in lieu of ARE-1 forms.4. Correlation of Goods Cleared and Exported:The lower authority rejected the refund claim on the grounds that the applicant could not correlate the goods cleared in DTA with the goods exported. The Commissioner (Appeals) found that the goods were exported through merchant exporters against 'H' forms and allowed a refund of Rs. 18,16,787/-. However, the revision application challenged this, arguing that the goods exported could not be correlated with those cleared in DTA due to discrepancies in descriptions and lack of direct evidence.5. Submission of No Objection Certificates from Merchant Exporters:The applicant did not submit no objection certificates from merchant exporters, which was one of the reasons for the rejection of the refund claim by the lower authority. The Commissioner (Appeals) did not address this issue explicitly in their findings.6. Procedural Compliance for Export under Notification No. 19/2004-C.E. (N.T.):The applicant did not follow the prescribed procedure under Notification No. 19/2004-C.E. (N.T.), which requires goods to be exported directly from the factory or warehouse with proper documentation and verification by Central Excise officers. The revision application emphasized that the applicant's failure to follow these procedures invalidated their claim for a rebate. The Government upheld this view, stating that the non-compliance with mandatory procedural requirements could not be condoned as a mere technical lapse.Conclusion:The Government found that the applicant did not satisfy the fundamental requirements for claiming a rebate under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.). The goods exported could not be correlated with those cleared in DTA, and the necessary export documentation was not produced. Consequently, the Government set aside the order-in-appeal, restored the order-in-original, and allowed the revision application, thereby rejecting the refund claim.