2013 (7) TMI 882 - CGOVT - Central Excise

Denial of refund claim - applicants have failed to produce the invoices issued by them to Khapri Depot to establish the duty payment - Held that - In order to avail benefit of rebate under Rule 18 r/w Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004 the applicant was required to comply with condition and procedure stipulated in the said Notification dated 6-9-2004. The original authority observed that the applicant failed to remove the goods by following ARE-I procedure under cover of ARE-1 as prescribed under Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004. Since no ARE-I form was prepared/submitted for clearance of excisable goods for export. ARE-1 application is the basic essential document for export of duty paid goods under rebate claim. The Customs certification on these copies of ARE-1 proves the export of goods but in the absence of duly certified copies of ARE-1 rebate sanctioning authority has no chance to compare these documents with triplicate copy of ARE-1 as stipulated under above discussed provisions of Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004 and therefore he cannot satisfy himself of the correctness of the rebate claim. Hence it cannot be established that excisable goods cleared from factory of manufacture on payment of duty has been exported. - due to non-compliance of ARE-1 procedure non-submission of original/duplicate copy of ARE-1 duly endorsed by customs and non-submission of Central Excise Invoice issued by manufacturer the export of duty paid goods cannot be established. The compliance of said fundamental requirement is must for sanctioning the rebate claim under Rule 18 of the Central Excise Rules 2002 read with Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004. As such the rebate claim is not admissible in this case under Rule 18 of Central Excise Rules 2002 read with Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004. - No infirmity in impugned order - Decided against assessee.

Issues Involved:
1. Non-submission of original duty paying invoices.
2. Non-compliance with ARE-1 procedure.
3. Rejection of refund claim due to procedural deficiencies.
4. Validity of Chartered Accountant's certificate as proof of duty payment.

Issue-wise Detailed Analysis:

1. Non-submission of original duty paying invoices:
The applicants, engaged in manufacturing petroleum products, filed a refund claim for Rs. 3,93,801/- on the grounds that they supplied ATF to international airlines, which should be treated as exports and thus eligible for a refund. The Deputy Commissioner rejected the claim because the applicants did not submit the original duty paying invoices issued to Khapri Depot. The Commissioner (Appeals) upheld this decision, emphasizing that without these invoices, it was difficult to ascertain the assessable value and the amount of refund.

2. Non-compliance with ARE-1 procedure:
The original authority rejected the refund claim, noting that the applicants failed to remove the goods under cover of ARE-1 as required by Notification No. 19/2004-C.E. (N.T.). The applicants did not prepare or submit the ARE-1 form, which is essential for clearing excisable goods for export. The government observed that compliance with the ARE-1 procedure is mandatory to avail of the rebate under Rule 18 read with Notification No. 19/2004-C.E. (N.T.). The absence of duly certified copies of ARE-1 meant that the rebate sanctioning authority could not verify the correctness of the rebate claim.

3. Rejection of refund claim due to procedural deficiencies:
The applicants argued that the refund should not be denied due to procedural deficiencies as long as the goods were indeed exported. They submitted invoices for stock transfer from Khapri Depot to Nagpur AFS and a Chartered Accountant's statement showing the correlation of the product removed from Gujarat Refinery to supplies to foreign-going aircraft. However, the government noted that the procedure stipulated in the Notification No. 19/2004-C.E. (N.T.) was not followed, and the necessary documents to establish the export of duty-paid goods were not submitted.

4. Validity of Chartered Accountant's certificate as proof of duty payment:
The applicants contended that the Chartered Accountant's certificate should suffice to prove the duty-paid nature of the goods. However, the government rejected this argument, stating that the Central Excise Invoice issued under Rule 11 of Central Excise Rules, 2002, is required to be submitted with the rebate claim. The applicants failed to submit these invoices, and thus, the duty-paid character of the goods could not be established.

Conclusion:
The government concluded that due to the non-compliance with ARE-1 procedures, the non-submission of original/duplicate copies of ARE-1 endorsed by customs, and the non-submission of Central Excise Invoices issued by the manufacturer, the export of duty-paid goods could not be established. Therefore, the rebate claim was not admissible under Rule 18 of Central Excise Rules, 2002, read with Notification No. 19/2004-C.E. (N.T.). The orders of the appellate authority were upheld, and the revision application was rejected for lack of merit.

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