TMI Blog2011 (2) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... r CBEC Circular, Condition of direct export from the factory of manufacture or warehouse is condonable. - rebate/drawback etc. are export-oriented schemes and unduly restricted and technical interpretation of procedure etc. is to be avoided in order not to defeat the very purpose of such schemes which serve as export incentive to boost export and earn foreign exchange and in case the substantive fact of export having been made is not in doubt, a liberal interpretation is to be given in case of any technical breaches. - 195/674/2010-RA - 198/2011-CX - Dated:- 24-2-2011 - Shri D.P. Singh, J. S/Shri Pramod Kumar Rai, Advocate and S.N. Panda, Consultant, for the Assessee. Shri Sushil Chandra, Assistant Commissioner, for the Department. [Order]. This revision application has been filed by M/s. Sanket Food Products Pvt. Ltd., Jalna against the order-in-appeal No. AGS (137) 64/2010 dated 12-7-10 passed by the Commissioner (Appeals) Central Excise Customs, Aurangabad. 2. Brief facts of the case are that the applicant is registered Central Excise assessee for manufacture of pan masala and gutkha falling under Chapter 24 of Central Excise Tariff Act, 1985 and is payi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed under Notification No. 19/2004-C.E. (N.T.), dated 6-9-04. 3. Aggrieved by this order-in-original, the applicant filed appeal with the Commissioner (Appeals) who rejected the same. 4. Aggrieved by this order-in-appeal, the applicant has filed this revision application on the following grounds : 4.1 That in case of Royal Marwar Tobacco Products Ltd., Gandhinagar (Manufacturer), rebate of excise duty has been allowed where goods were exported by Merchant exporter M/s. Shree Meenakshi Food Products Pvt. Ltd. in similar conditions. It is a fundamental right under Article 14 of Constitution that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. 14 Equality before law - The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. 4.2 By the impugned order-in-appeal along with order-in-original and show cause notice department has rejected the claim of applicant on the sole ground that goods were not directly exported from factory rather a merchant exporter has been involved in between. However, the department has not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be granted under Rule 18 of Central Excise Rules, 2002 alone, however, certain extra restrictions may be put in place. The Notification No. 32/2008 dated 28-8-08 under which rebate needs to be sanctioned further makes it clear that rebate is sanctioned under Rule 18 of Central Excise Rules, 2002 alone read with restrictions which may be put in place under Rule 14 of Pan Masala Rules, 2008 for sake of clarity opening paragraph of Notification No. 32/2008 dated 28-8-08 is reproduced below : Notification 32/2008 dated 28-8-08 In exercise of the powers conferred by Rule 18 of the Central Excise Rules, 2002 read with Rule 14 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, the Central Government hereby grants rebate of duty on the excisable goods as specified in column (2) of the Table annexed hereto, on their exportation out of India on or after 1st July, 2008, to any country except Nepal and Bhutan, to the extent specified in the corresponding entry in Column (3) of the said Table, subject to the following conditions, limitations and procedures, namely :- Since Notification No. 32/2008 dated 28-8-08 has been issued under Rule 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory or warehouse can exercise the option of exporting the goods sealed at the place of dispatch by a Central Excise Officer or under self-sealing : 4.7 Under Notification 32/2008 following additional conditions and limitations have been prescribed for claiming rebate under Rule 18 of Central Excise Rules, 2002 in respect of pan masala/gutkha of Chapter 24. Conditions, Limitations Procedures : (i) the duty has been paid on the excisable goods under Section 3A of the Central Excise Act, 1944 (1 of 1944); Comment : We have fulfilled this condition as it is admitted fact that duty has been paid under Section 3A of Central Excise Act, 1944. (ii) No rebate of duty paid on the materials used in such excisable goods shall be claimed; Comment : Admittedly we have not claimed any rebate of duty paid on inputs of our finished products. (iii) The excisable goods shall be exported directly from a factory or a warehouse; Comment : As per this condition goods can be exported from factory as well as a warehouse which is used for storage of duty paid goods. In our case goods have been exported from duty paid warehouse which is registered un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignments with the particulars as cited in the application (ARE-1) and if he finds that the same are correct and the goods are exportable in accordance with the laws for the time being in force (for example, they are not prohibited or restricted from being exported), shall allow export thereof. Thereafter, he will certify on the copies of the ARE-1 that the goods have been duly exported citing the shipping bill number and date and other particulars of export. 7.5 The Officer of Customs shall return the original and quintuplicate (optional copy for exporter) copies of application to the exporter and forward the duplicate copy of application either by post or by handing over to the exporter in a tamper proof sealed cover to the officer specified in the application, from whom exporter wants to claim rebate. However, where exporter claims rebate by electronic declaration on Electronic Data Interchange system of Customs, the duplicate shall be sent to the Excise Rebate Audit Section at the place of export. 7.6 The exporter shall use the quintuplicate copy for the purposes of claiming any other export incentive. Therefore goods exported by us through merchant exporter have actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our case were actually examined and sealed at the place of export by officers of customs as endorsed on ARE-1 and shipping bills under main paragraph of 3(a)(xiv) of Notification 19/2004 and not under proviso of said paragraph as in our case the consignment was not pre-sealed. 4.11 Merchant exporter has procured duty paid goods directly from the applicant. There is no system of physical verification of goods by excise officers under Self removal procedure before we dispatch these goods to our regular buyers in DTA or to merchant exporters under excise law. The law presumes that the goods supplied by a manufacturer, who is maintaining records of his production and dispatch, are same as those which are reflected on manufacturer s invoice. It is wroth mentioning that we are maintaining records of production and dispatch of duty paid goods and are filling returns to excise authorities regularly. The invoices on which goods have been supplied to merchant exporter are part of our returns submitted to excise authorities which has been accepted by them. 4.12 ARE-1 mentions the name of manufacturer, description of the goods alongwith mark and Nos. of the goods. The goods cleared by us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the packages and description mentioned in ARE-1. Therefore the identity of goods exported and goods manufactured by us stands established and thus the substantive requirement of said procedure mentioned at Sr.(iii) of Notification 32/2008 stands fulfilled. 4.15 That it is government policy that export should not suffer any duty. Once the substantial requirement of export out of country of the goods manufactured by us is proved, the substantive benefit of rebate cannot be denied for alleged procedural aberrations. The substantive right has been created under Rule 18 itself and procedure has been prescribed under Notification No. 19/2004 and Notification 32/2008. Notification No. 19/2004 Notification 32/2008 has neither created any substantive right nor extinguished any substantive right; rather it has prescribed procedure for claiming substantive rebate benefit conferred under Rule 18 of Central Excise Rules, 2002. Therefore the applicant submits that applicant is eligible for the rebate as substantial requirement of law namely duty paid character of goods and their export has been proved beyond doubt. 5. The case was listed for personal hearing on 2-2-2011 18-2-2011. Shri P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been followed scrupulously by the manufacturer as well as the exporter and therefore correlation between the excisable goods claimed to have been cleared for export from factory of manufacturer and the export documents as relevant to such export clearances cannot be established. Apart from this nothing is brought on records regarding transaction between the manufacturer and exporter like agreement or contract between them towards supply of goods, invoices issued by manufacturer etc. 6. The applicant vide letter dated 4-2-2011 submitted that during the hearing the Hon ble authority wanted to have evidence of duty paid character of goods. Accordingly, we are submitting a certificate given by Range Superintendent along with copy of verification report in respect of each ARE-1 given by Range to divisional Assistant Commissioner, which proves in unequivocal terms that the goods in respect of which rebate has been claimed are duty paid goods and they have been exported out of India. It was further emphasized that applicant is paying duty under compounded levy scheme and for the relevant period whatever was the duty liability that has been quantified and paid (in case of delayed paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of the ARE-1 by the Superintendent Range is to ensure that the proper duty has been paid by the manufacture at the time of clearance of goods from the factory/warehouse. In the instant case, the applicant manufacture/and merchant exporter exported the goods under self-sealing. They did not submit the triplicate copy of the ARE-1 to the concerned Range Superintendent, but these were enclosed with the rebate claims. Now, the applicant has submitted a certificates issued by the Superintendent Central Excise, Range Jalna certifying the given details of duty payment certificate alongwith basis of corelating the goods exported with the goods cleared from factory which reads as under : TO WHOMSOEVER IT MAY CONCERN This is to be certified that the Goods Exported against ARE-1 No. 01 to ARE-1 No. 10 are manufactured by M/s. Sanket Food Products Pvt. Ltd. (Unit -II) Gut No. 186, Dawalwadi, Tq Badnapur, Jalna during the month of Oct., Nov. Dec.-2009. The Excise Duty for the month of Oct., Nov. Dec. -2009 has already been paid by M/s. Sanket Food Products Pvt. Ltd. (Unit-II) Gut No. 186, Dawalwadi, Tq Badnapur, Jalna along with interest before the filing of rebate claim against ARE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture, Government observes that the goods were cleared from the premises of the merchant exporter under self-sealing. They did not get the goods examined by the Central Excise Officer as prescribed under CBEC Circular No. 294/10-97-CX., dated 30-1-1997. In this case the condition of exporting the goods from the factory of manufacture or warehouse is not fulfilled. So it is to be examined whether the exported goods are corelatable with the goods cleared from the factory of manufacture. In the instant case, on perusal of various documents submitted by the applicant such as ARE-1s, Shipping Bills, invoices, Bill of Lading etc., Government observes that the description of goods (pan masala with tobacco Goa-1000, Gutkha (1.8g per pouch) (100 pouches = 50 pkts = 500 gms) pouches per bag/cartons (total 75,00,000 pouches), their Batch No./Marking, No. of Cartons Marks No. (SIL-GG-CD-600 to SIL-GG-CD-7500) No. Description of Packages (1500 bags/cartons), Net Weight (13500 kgs.) Gross Weight (16800 kgms) etc. fully tally with each other which clearly establishes that the goods cleared from the factory of manufacture on payment of duty has actually been exported which meets the substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory of manufacture as the ARE-1s, Shipping Bill, Invoice and Pan Masala Pouches/packages bear the Mark Nos./Batch Nos. of the goods. The ratio of the GOI Order No. 54 to 60/09 dated 5-2-09 in the case of M/s. Gujarat Trading Co., Rajkot v. CCE, Rajkot is squarely applicable in this case wherein it has been held that where the exported goods are corelatable with the goods cleared from the factory of manufacture or warehouse, the procedure prescribed for merchant exporter exporting the goods from a place other than factory of manufacturer or warehouse by the CBEC s Circular 294/10/97-C.X., dated 30-1-1997 can be relaxed and the rebate is admissible for merchant exporter. Government observes that in this particular case, M/s. Gujarat Trading Co. had filed revision application against the order-in-appeal No. 536-542/2005, 236- 242(Raj)/Commr. (A)DK/RAJ dated 2-12-05 passed by the Commissioner of Central Excise (Appeals), Rajkot. In this case also goods were exported from a place other than factory of manufacture/warehouse and triplicate copy was not endorsed on the basis of the certificate of Range Superintendent and as the goods exported fully tallying with the goods cleared from ..... 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