TaxTMI 
TaxTMI 
2016 (3) TMI 1164
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...., above discrepancies were conveyed to the applicant vide Deficiency Memo-cum-Show Cause Notice (DM). 2.2 The show cause notice was adjudicated. Original authority in impugned Order-in-Original observed that the vessel in which the goods covered in both rebate claims were loaded colluded with another vessel immediately after leaving the port and as such the goods cannot be treated as exported. Hence rebate claims are not admissible. 3. Aggrieved by the said order the applicant filed appeal before the Commissioner (Appeals) who vide Order-in-Appeal No. US/271/RGD/2012, dated 25-4-2012 rejected the same. 4. Being aggrieved by the impugned Order-in-Appeal, the applicant has filed this revision application under Section 35EE of Central Excise Act, 1944 before Central Government on the following grounds : 4.1 The department is erred in rejecting the rebate claims in spite of submitting the 'Bank Certificate of Export Realization' evidencing the export of goods and receipt of export sale proceeds in foreign exchange. That the said certificate was enclosed to the rebate claim, the department merely brushed aside the said submission of the applicants. That the depar....
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....he sales proceeds in the convertible foreign exchange and therefore the rebate is legally eligible to the applicant. 4.4 The Commissioner (Appeals) erred in rejecting the claims only by relying upon the word 'exported' used in the text of Rule 18, Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and Para 8.4 under Chapter 8 of the C.B.E. & C. Manual. That the present case relates to accidental loss of export goods which requires different look at rules framed. That physically the goods have been cleared from the factory under supervision of Central Excise Officer by following all the procedures laid down for export. That the export was on FOB terms and the sale was complete and the ownership of goods was transferred to buyer once the goods were delivered on board for delivering the goods to overseas buyer. 4.5 The Commissioner (Appeals) erred in rejecting the claim relying upon the definition of word 'export' as given under Section 2(18) of the Customs Act, 1962. That the applicants submit that the goods were removed from the factory and loaded on the ship for taking the same to a place outside India. That the definition does not envisage that goods must reach in th....
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....sale proceeds in foreign currency is a condition precedent to rebate claim which has been fulfilled by the applicant. Therefore, they are legally eligible for the rebate claim which is required to be paid. 5. Personal hearing scheduled in this case on 3-8-2015 was attended by Shri P.K. Shetty, Advocate on behalf of the applicant who reiterated the grounds of revision application and also stated that once the goods were shipped on board the ownership stood transferred to the buyer particularly as the sale is on FOB basis and that therefore, they should not be penalized for circumstances beyond their control. Nobody attended hearing on behalf of department. 6. Government has carefully gone through the relevant case records available in case file, oral & written submissions and perused the impugned Order-in-Original and Order-in-Appeal. 7. On perusal of records, Government observes that during the scrutiny of the rebate claims filed by the applicant, it was noticed by the original authority that there was no endorsement from Customs on the reverse side of ARE-1s, that there was no endorsement on shipping bill by Customs and that copy of mate's receipt not submitted. ....
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.... material used in the manufacture of such goods (i) If the goods are exported by sea or air, the date on which the Ship on the aircraft in which such goods are loaded leaves India or" 8.4 Further, the sanction of rebate claim under the aforesaid provisions is governed by Paragraph 8.4. of C.B.E. & C. Manual of Departmental instructions which states as follows :- "8.4 After satisfying himself that the goods cleared for export under the relevant ARE-1 applications mentioned in the claim were actually exported as evident by the original and duplicate copies of ARE-1 duty certified by Customs and that the goods are of duty paid character as certified on the triplicate copy of ARE-1 received from the jurisdictional Superintendent of Central Excise, the rebate sanctioning authority will sanction the rebate in part or full. In case of any reduction or rejection of the claim, an opportunity shall be provided to the exporter to explain the case and a reasoned order shall be issued". 9. The harmonious reading of the abovesaid provisions reveals that export takes place when goods leave India to a place outside India. It is abundantly clear that....
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....e goods outside the territorial waters of India. It is then that an export may be said to have taken place. In the instant case, the said cargo was destroyed when the vessel sunk within the territorial waters of India. There was, therefore, no export of the said cargo. Accordingly, no duty drawback was available in respect of the said cargo. 6. The civil appeal is allowed." The above judgment though rendered in the context of admissibility of drawback under Section 75, the ratio of the decision is squarely applicable to the present case as both rebate and drawback arise only upon export of goods. 11. Government also observes that it is an undisputed fact on record that the vessel on which the goods covered in the said rebate claims were loaded collided with another vessel immediately after leaving the port. Thus the goods in question were not actually exported. The same is further corroborated with the other discrepancies noticed in rebate claims by the original authority. This clearly shows that the goods in fact were not exported and question of any rebate of duty paid on exported goods does not arise. 12. Government also notes that Commissioner (Appeals) has r....