AI Drafter 
TaxTMI 
TaxTMI 
2015 (8) TMI 1329
X X X X Extracts X X X X
X X X X Extracts X X X X
....eturns, the applicant had mentioned "Export against H-Form" or "Export Sale". However, on further scrutiny, it was observed that the applicant had not followed export procedure as detailed in Rule 19 of Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 as amended and had violated the provisions of Rule 19 of the Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 as amended. Though the applicant had executed bond but neither any ARE-1 nor proof of export in respect of above clearances was filed with the proper officer, which was the statutory requirement as provided under Rule 19 of the Central Excise Rules, 2002. Therefore, it was held vide Order-in-Original passed by the Deputy Commissioner, Central Excise, Jalandhar, that the clearances without following the proper procedure, appeared to be clearances without payment of Central Excise duty amounting to Rs. 3,15,610/- (Duty Rs. 3,06,417/- + Edu. Cess Rs. 6,129/- + Rs. 3,064/-) in violation of Rule 19 of the Central Excise Rules, 2002 and the same was recoverable under Section 11A of Central Excise Act, 1944. 3. Being aggrieved by the said Order-in-Origina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Central Excise - 1999 (112) E.L.T. 765 (S.C.) and Cosmonaut Chemicals v. Union of India - 2009 (233) E.L.T. 46 (Guj.). 4.7 That there is no loss of revenue and it is not a case where the appellant has cleared the goods for home consumption. 4.8 That the appellant was new in the field and was not aware that copies of Form-'H' duly attested are to be submitted with the department within the stipulated time. Reliance is placed upon the Hon'ble Supreme Court of India decision in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. - (1979) 44 STC 42. 4.9 That it is well-settled by now that any procedural defect cannot take away the substantive right of the appellant. At best it can be said to be a case of procedural lapse in not furnishing the proof of export within time. The appellant is ready to produce the 'H' forms to prove that the goods in question had been exported by the merchant-exporter. Reliance is placed upon the Hon'ble Supreme Court of India decision in the case of Sambhaji v. Gangabai - 2009 (240) E.L.T. 161. 4.10 That the penalty of Rs. 30,000/ - levied under Rule 25 of Central Excise Rules, 2002 is untenable inasmuch as the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fact that the applicant, a unit registered with Central Excise, availed benefit of duty free clearances for the purpose of export but failed to fulfill the conditions and did not follow the prescribed procedure thereof. In the quarterly ER-3 returns, the impugned excisable goods were shown as cleared for export with remarks against the said sales as "Export against H Form" or "Export Sale". They neither paid duty on these goods nor did they comply with the provisions of Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 under Rule 19 ibid. Though they executed a bond, they failed to file ARE-1 with proper officer and also failed to submit proof of export of goods in question. 9. In reference to the above, Government first proceeds to examine the statutory position and the requirement of Form ARE-1. 9.1 Government notes that export of goods without payment of duty is governed by Rule 19 of Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 read with Chapter 7 of C.B.E. & C.'s Central Excise Manual and finds that ARE-1 is the basic and essential document for exports as an application for removal of excisable goods for exports. 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
....exemption limit based on value of clearance and are not registered with Central Excise. The requirements include obtaining of declarant code no. in terms of Notification No. 36/2005-C.E. (N.T.), dated 26-6-2001, use of pre-authenticated invoices bearing printed serial number, declarant code no., progressive total of clearances, EXIM code, etc.; filing prescribed quarterly statement; submitting proof of export to Range Officer within six months from date of clearance from factory; proof of clearance in case of exports through merchant exporters including Form-H in case of goods exported directly from the unit. 9.2 In light of the above stated statutory provision, Government observes that any export clearance, intended to be made without payment of duty, will be subject to Rule 19 ibid read with Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 in case of registered units and C.B.E. & C.'s Circular No. 648/39/2002, dated 25-7-2007 in case of declarant units. ARE-1 is the principal document under Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 that establishes that the applicant has either followed the procedure for sealing of goods and examination of goods at place ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....extile Processors - 2008 (231) E.L.T. 3 (S.C.). Also it is settled that a notification has to be treated as a part of the statute and it should be read along with the Act as held by in the case of Collector of Central Excise v. Parle Exports (P) Ltd. - 1988 (38) E.L.T. 741 (S.C.) and Orient Weaving Mills Pvt. Ltd. v. Union of India - 1978 (2) E.L.T. (J311) (S.C.) (Constitution Bench). 9.3.4 Government notes that the applicant relied on the various judgments regarding procedural relaxation on technical grounds. The point which needs to be emphasized is that when the applicant seeks rebate under Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001, which prescribes compliance of certain conditions, the same cannot be ignored. While claiming the rebate under Rule 19 ibid, the applicant should have ensured strict compliance of the conditions attached to the Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001. Government place reliance on the judgment in the case of Mihir Textiles Ltd. v. Collector of Customs, Bombay - 1997 (92) E.L.T. 9 (S.C.), wherein it is held, that : "concessional relief of duty which is made dependent on the satisfaction of certain conditions cannot ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wed by them. As such, H-Form is not a valid document as proof of export in the case of the applicant and their contention in this regard is not tenable. 10. In view of above discussion, Government finds that the demand of duty along with interest will sustain. Also once contravention of relevant statutory provisions stands established, imposition of penalty will also sustain. The applicant have contested the imposition of penalty on the ground of non-mentioning of sub-clause of Rule 25 of Central Excise Rules, 2002 relying on the Hon'ble Supreme Court of India ruling in the case of Amrit Foods v. Commissioner of Central Excise - 2005 (190) E.L.T. 433 (S.C.), in which it was observed that before imposing the penalty, it was necessary for the assessee to be put on notice as to the exact nature of contravention for which the assessee was liable under the provisions of Rule 173Q. In the present case, the exact nature of contravention has clearly been set out in the show cause notice and upheld in the impugned order. Government observes that the acts of commission by the applicant cannot be ignored on mere technical ground that the relevant sub-rule of Rule 25 is not specificall....