2015 (10) TMI 2614 - CGOVT - Central Excise

Misdeclaration of the export of goods - DEPB Scheme - procedural infirmity - applicability of rule 19 of CER 2002 - applicant initially exported the goods under ARE-1 No. EX/109/2005-06 dated 31-10-2009 under DEPB scheme duly sealed and signed by the Inspector of Central Excise. At the port of export the Customs officials refused to sign the same on the ground that the ARE-1 was not signed by the Superintendent Central Excise. That being advised by the Customs authorities the applicant prepared another ARE-1 with the same number and date and same details and the same was produced before the Customs authorities as self-sealing in order to export the goods expeditiously. That the Customs authorities after being satisfied allowed the export and signed the duplicate copy of the ARE-1. Held that - the applicant has contravened the provisions of Rule 19 of the Rules ibid inasmuch as the applicant has prepared parallel set of statutory documents which cannot be created. ARE-1 is in the nature of an application made to the proper officer for removal of goods for export under Rule 18. If for any reason such an application is not found fit for use to remove the goods for export it should have been withdrawn or amended with the approval of the proper officer as laid down in Notification No. 43/2001 dated 26-6-2001. There is nothing on record to show that any such effort was made by the applicant. The applicant instead created a parallel set of statutory documents which is not laid down in Notification therefore is not correct. Imposition of penalty u/s 11AC - Held that - the order passed by Commissioner (Appeals) is erroneous and not maintainable the question of imposition of penalty does not arise. Application rejected.

Summary

Issues Involved:
1. Condonation of delay in filing the revision application.
2. Compliance with procedural requirements for export under Rule 19 of Central Excise Rules, 2002 and Notification No. 43/2001-C.E. (N.T.).
3. Validity of parallel ARE-1 documents and their implications.
4. Imposition of duty, interest, and penalty under Sections 11A, 11AB, and 11AC of the Central Excise Act, 1944.

Issue 1: Condonation of Delay in Filing the Revision Application

The applicant filed a revision application after a delay of two years, five months, and ten days, attributing the delay to pursuing the appeal before the wrong forum (CESTAT). The government noted that the applicant filed the appeal before CESTAT within the scheduled time and dismissed the appeal as not maintainable on 8-10-2013. The applicant then filed the revision application on 29-10-2013. The government, referencing various High Court rulings, excluded the time spent before CESTAT and condoned the delay, allowing the revision application to proceed.

Issue 2: Compliance with Procedural Requirements for Export

The applicant cleared goods under ARE-1 No. EX/109/2005-06 for export without payment of duty under Rule 19 of Central Excise Rules, 2002 and Notification No. 43/2001-C.E. (N.T.). However, the audit found that the duplicate copy of ARE-1 was not certified by Customs, indicating the goods were not exported. The applicant claimed procedural infirmity, stating that the goods were initially sealed by an Inspector instead of a Superintendent, leading to the Customs refusal. They then prepared another ARE-1 with the same number and details for self-sealing. The government observed that the applicant contravened Rule 19 by not following the prescribed procedure and creating parallel documents without proper withdrawal or amendment of the initial ARE-1.

Issue 3: Validity of Parallel ARE-1 Documents

The government noted discrepancies in the value and weight between the two ARE-1 documents. The ARE-1 sealed by the Central Excise Officer showed a value of Rs. 9,06,984/- and duty of Rs. 1,45,117/-, while the self-sealed ARE-1 showed Rs. 9,07,054/- and duty of Rs. 1,45,129/-. The weight also differed slightly. The government concluded that the goods cleared under the certified ARE-1 were not the same as those cleared under the self-sealed ARE-1, supporting the Commissioner (Appeals)'s observation that the goods were not exported as claimed.

Issue 4: Imposition of Duty, Interest, and Penalty

The government upheld the demand for duty and interest, finding that the applicant's actions constituted a contravention of Rule 19 and the relevant notifications. The imposition of a penalty under Section 11AC was also upheld, as the contravention of statutory provisions was established. The government's stance was reinforced by Supreme Court rulings emphasizing strict adherence to statutory provisions and procedures.

Conclusion:

The revision application was rejected, and the original orders demanding duty, interest, and imposing a penalty were upheld. The government's decision was based on the applicant's failure to comply with procedural requirements, creation of parallel documents, and the established contravention of statutory provisions.