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 directory rather than mandatory. It accepted the concurrent findings that duty had been paid on the goods and that the same goods were exported, as established by the documents produced by the appellant. Consequently, rebate of duty was held admissible to the appellant alone. Any rebate claim by the State Trading Corporation of India on the same goods was directed to be rejected. The appeal was allowed with consequential relief.

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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.

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