2018 (12) TMI 166 - HC - Central Excise

Submission of ARE-1 Form Essential for Tax Rebate Claims Under Rule 18

M/s Triputi Steel Traders (Prop. M/s Mahamaya Mines Pvt. Ltd.) Versus The Assistant Commissioner Of Central Excise Division-I, Nagpur, District And The Assistant Commissionere Of Central Excise And Customs (Appeals) Civil Lines Versus The Joint Secretary Govt. Of India

M/s Triputi Steel Traders (Prop. M/s Mahamaya Mines Pvt. Ltd.) Versus The Assistant Commissioner Of Central Excise Division-I, Nagpur, District And The ... Issues Involved:1. Whether the requirement of submission of ARE-1 form is mandatory or directory for claiming rebate under Rule 18 of the Central Excise Rules, 2002.2. Whether the rejection of the rebate claim by the authorities due to non-submission of ARE-1 form was justified.Issue-wise Detailed Analysis:1. Mandatory vs. Directory Requirement of ARE-1 Form:The central question was whether the submission of ARE-1 form is a mandatory requirement or merely procedural for claiming a rebate under Rule 18 of the Central Excise Rules, 2002. The appellant argued that the requirement of ARE-1 is procedural and not substantive, relying on the Supreme Court's decision in Commissioner of Customs (Preventive) Mumbai Vs. M. Ambalal & Company, which suggested that procedural requirements should not impede the substantive right to rebate. Conversely, the Revenue contended that the submission of ARE-1 is a mandatory requirement to establish that the goods have suffered duty at the time of removal from the factory and were actually exported.The court analyzed Rule 18 and the notification dated 06.09.04, which specifies the conditions and procedures for claiming a rebate. The court emphasized that the rebate is subject to fulfilling the conditions and procedures specified in the notification, which includes the submission of ARE-1. The court noted that the purpose of ARE-1 is to provide authentic certification by excise and customs authorities regarding the duty-paid status and export of goods, ensuring the efficiency of the administrative process and preventing fraudulent claims.The court concluded that the requirement of ARE-1 is substantive and mandatory. However, it acknowledged that in exceptional cases, where the assessee could not submit ARE-1 due to reasons beyond their control, they might be allowed to provide other collateral documentary evidence. This exception is not a choice but a necessity to be proven by the assessee.2. Justification of Rejection of Rebate Claim:The appellant's rebate claim was rejected by the authorities due to non-submission of ARE-1 and other reliable evidence of duty-paid export. The appellant argued that the authorities should have considered other collateral evidence provided, such as invoices, shipping bills, bills of lading, bank realization certificates, and disclaimer certificates.The court examined whether the authorities had considered the other evidence submitted by the appellant. It found that the authorities had indeed scrutinized the collateral evidence but found them insufficient. The authorities noted discrepancies, such as the shipping bills being filed under the DEPB Scheme and the commercial invoices not being issued under Rule 11 of the Central Excise Rules, 2002. The bank realization certificates did not correlate with the exported goods for which the rebate was claimed.The court upheld the authorities' decision, stating that the appellant failed to meet the mandatory requirement of submitting ARE-1 and did not provide satisfactory collateral evidence to support the rebate claim. The court reiterated that while procedural flexibility might be allowed in exceptional cases, the appellant did not demonstrate any compelling reason for the non-submission of ARE-1.Conclusion:The court dismissed the appeal, affirming that the submission of ARE-1 is a mandatory requirement for claiming a rebate under Rule 18 of the Central Excise Rules, 2002. The authorities' rejection of the rebate claim was justified due to the appellant's failure to provide the required ARE-1 form and insufficient collateral evidence. The judgment underscores the importance of adhering to procedural requirements in tax rebate claims while allowing limited flexibility in exceptional circumstances.