2016 (5) TMI 7 - HC - Central Excise

Court sets aside orders, grants State liberty for fresh proceedings, emphasizes compliance with export procedures.

M/s NVR Forgings Versus Union of India and others

M/s NVR Forgings Versus Union of India and others - 2016 (335) E.L.T. 679 (P & H) Issues involved:Petitioner seeks to quash order rejecting revision application and upholding appeal order. Dispute over compliance with export procedure, duty payment, and penalty imposition. Challenge regarding revisional authority's rank and legality.Analysis:Issue 1: Revisional Authority's RankThe petitioner challenged the revisional authority's rank, arguing that the officer who upheld the impugned demand and penalty and dismissed the appeal was of the same rank. Citing a judgment, the petitioner contended that revision by an officer of the same rank was impermissible. The Court referred to previous cases and held that revision by an officer of the same rank was not allowed. The impugned order was passed by a Joint Secretary to the Government of India, who was also the Commissioner of Central Excise and Customs, thus violating the law. The Court distinguished the judgments cited by the respondents, stating they were based on different fact situations and did not support their position.Issue 2: Compliance with Export ProcedureThe petitioner, engaged in manufacturing and exporting hand tools, availed exemption benefits but faced a duty demand due to alleged non-compliance with export procedure. The petitioner exported goods through a merchant exporter, failing to furnish required documents like ARE-1 and proof of export, as per Rule 19 of the Central Excise Rules. Despite executing a bond, the petitioner did not meet the conditions of the relevant notification, leading to a demand for duty payment and a penalty imposition. The Commissioner (Appeals) upheld the penalty and demand, emphasizing the need for compliance with export procedures. The revisional authority also dismissed the revision application, stating that the petitioner failed to follow the required procedure, being registered with the department and ineligible for simplified export procedures.Issue 3: Legal Validity of OrdersThe Court allowed the petitions, setting aside the impugned orders but granting the State the liberty to proceed afresh in accordance with the law, without prejudicing the rights of the parties. The judgment highlighted the impermissibility of revision by an officer of the same rank and emphasized the necessity for compliance with export procedures to avoid duty demands and penalties. The decision provided clarity on the revisional authority's rank and reiterated the importance of adhering to statutory requirements in export transactions to avoid legal repercussions.