TMI Blog2011 (2) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... sly, Order is set aside and the matter is remanded to the Revisionary Authority for fresh decision in accordance with law. - 7033 of 2010 - - - Dated:- 14-2-2011 - Dipak Misra, C.J. and Sanjiv Khanna, J. REPRESENTED BY : S/Shri Rajesh Tuli, Tushar Jain and Sanjay Sethi, Advocates, for the Petitioner. Shri Satish Kumar, Advocate, for the Respondent. [Judgment per : Sanjiv Khanna, J.]. Mr. Pankaj Kumar Jain, proprietor Parshva Overseas assails the Order dated 18th February, 2010 passed by Mr. D.P. Singh, Joint Secretary, allowing the revision application filed by the Commissioner of Central Excise, Delhi-I, represented before us by the Union of India - the respondent. The relevant and operative portion of the impugned Order reads : 8. Government further observes that para 1.5 of Part V of C.B.E.C. Excise Manual of Supplementary Instructions, 2005 stipulated as under : 1.5 The benefit of input stage rebate cannot be claimed in any of the following situations. : (i) Where the finished goods are exported under claim for duty drawback; (ii)........................................... (iii) Where facility of input stage credit is available under Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23,62,737/-. 3. The petitioner is a manufacturer and exporter of stainless steel circles and utensils. For this purpose it purchases stainless steel coils/flats which are an input or raw product which is first converted into stainless steel circles and then in the second stage is used to manufacture stainless steel utensils. Conversion of stainless steel coils/flats into stainless steel circles attracts payment of excise duty under the Central Excise Rules, 1944 but conversion of stainless steel circles into stainless steel utensils is exempt from payment of excise duty as per Notification No. 10/2003, dated 1st March, 2003. The petitioner had purchased Stainless Steel Coils/flats from registered dealers for manufacture of stainless steel circles. Central Excise duty was paid on Stainless Steel Flats/Coils when the said raw materials were converted into stainless steel circles. The petitioner also purchased stainless steel circles on which excise duty was paid. The duty paid on the inputs/raw material as well as manufacture of stainless steel circles was duly credited in the RG 23 part II register maintained under the provisions of Central Excise Rules. 4. Scrap was generated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs conferred by Rule 18 of the Central Excise (No. 2) Rules 2001, the Central Government hereby directs that rebate of whole of the duty paid on excisable goods (hereinafter referred to as materials ) used in the manufacture or processing of export goods shall, on their exportation out of India, to any country except Nepal and Bhutan, be paid subject to the conditions and the procedure specified hereinafter :- (1) Filing of declaration. - The manufacturer or processor shall file a declaration with the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured or proceeded along with their rate of duty leviable and manufacturing/processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality. The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be exported; (2) Verification of Input-output ratio - The Assistant Commissioner of Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of manufacturer or processor; (c) any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor; (5) Procedure for export - The goods shall be exported on the application in Form A.R.E. 2 specified in the Annexure and the procedures specified in Ministry of Finance (Department of Revenue) notification No. 40/2001 - Central Excise (N.T.), dated 26th June, 2001 or in notification No. 42/2001 - Central Excise dated 26th June, 2001 shall be followed. (6) Presentation of claim of rebate - The claim for rebate of duty paid on materials used in the manufacture or processing of goods shall be lodged only with the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction of the place approved for manufacture or processing of such export goods. 9. Form ARE-2 is a part of the said notification. The heading of the ARE-2 form reads as :- Combined application for removal of goods for export under claim for rebate of duty paid on excisable materials used in the manufacture and packing of such goods and removal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs or on manufacture, when it is not utilized or is only partly utilized. The contention of the petitioner is that he is not claiming any benefit on account of utilized Cenvat credit and the rebate is claimed for the un-utilised Cenvat credit. In other words, the contention of the petitioner is that non-utilization of Cenvat credit is entitled to rebate in Rule 18 read with Notification No. 41/2001 dated 26th June, 2001. This aspect has not been dealt with and examined in the impugned order. 15. Learned counsel for the respondent, in the course of arguments had relied upon Form ARE-2 to contend that a declaration has to be furnished by the applicant that they have not availed of Cenvat credit under Cenvat Credit Rules. No doubt the Form and declaration have to be examined, but what is important and relevant is the interpretation of the words not availed of facility of Cenvat credit in the Form/declaration. It has to be examined whether these words mean and include even a part utilization of Cenvat credit in respect of which no rebate is sought or refer to non-utilization of the Cenvat credit in its entirety. In this connection, it may be relevant to refer to paragraph 4(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification granting exemption. 17. Thereafter, it has been observed that distinction must be made between a provision in a statute which is substantive and enacted with certain specific objective to fulfill objective of policy; and provisions which are procedural and technical in nature. The eligibility condition is to be given strict meaning; whereof the notifications have to be interpreted in terms of their language. But once the applicant-assessee satisfies and meets the eligibility conditions, procedural provisions have to be construed liberally. Then doctrine of substantial compliance applies. The said doctrine is equitable in nature and designed to avoid hardship. Substantial compliance depends upon facts and circumstances of each case, the purpose and object to be achieved in the context of exemption and purpose of the Rule and the Regulations. However, such defence cannot be pleaded if there is a clear statutory prerequisite which effectuates the object and purpose of the statute which has not been met. Substantial compliance means actual compliance in respect of the substance essential to every reasonable objective of the statute . In Commissioner of Central Excise v. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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