1997 (7) TMI 383 - AT - Central Excise

Rebate on exported fabrics allowed; Rule 12(1) held directory, appellant alone entitled, STC rebate claim rejected

The CEGAT, New Delhi allowed the appeal, holding that the procedural requirements under Rule 12(1) for claiming rebate of duty on exported fabrics are ... Grant of refund of duty paid on the fabrics - compliance of the requisite procedure prescribed under the Rules - HELD THAT:- Since the relaxation is provided under sub-rule (1) of Rule 12 appears to be directory/procedural and not mandatory. We also note that ld. Collector (Appeals) in his order has categorically held that there is no dispute that duty was paid on the goods; that there was no dispute that the goods were exported; that these contentions were based on the documents produced by the appellants. Having regard to the fact that there is a categorical finding about the same goods as had paid duty being exported and the documents being available with the appellants we hold that rebate of duty is admissible to the appellants. However, we would like to make it clear that this rebate shall be available only to the appellants and not to State Trading Corporation of India. In case, any claim has been filed by the State Trading Corporation of India pending rebate of duty on the goods the same shall have to be rejected. The appeal is, therefore, allowed with consequential relief, if any, in accordance with law. Issues Involved: The appeal involves the rejection of a refund claim by the Assistant Collector and the Ld. Collector (Appeals) based on non-compliance with the prescribed procedure under Rule 12 of the Central Excise Rules, 1944.Summary:The appellants received an order from the State Trading Corporation of India for supplying fabrics to Nicaragua and sought a refund of duty paid on the fabrics. The Assistant Collector and the Ld. Collector (Appeals) rejected the plea citing non-compliance with the prescribed procedure under Rule 12. The appellants appealed this decision.The appellants argued that Rule 12 is directory, not mandatory, and the Collector can relax the procedure if satisfied that duty-paid goods were exported. They provided documents showing duty payment and exportation. Citing precedents, they contended that the Collector (Appeals) has the power to relax procedures under Rule 12.The JDR argued that Rule 12(1) requirements are statutory and mandatory, emphasizing the need for goods to travel from the manufacturer to the port under specific forms.The Tribunal noted that Rule 12 allows for rebate of duty on final products and provides for relaxation of procedures under the proviso if goods are proven to be duty-paid and exported. The Tribunal found the relaxation provision to be procedural, not mandatory. Given the evidence presented by the appellants, the Tribunal held that the refund claim should be allowed. However, the rebate was granted only to the appellants, not the State Trading Corporation of India. Any pending claims by the Corporation were to be rejected. The appeal was allowed with consequential relief as per the law.