TMI Blog2012 (9) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... rder (Draft)]. These 55 revision applications have been filed by the applicant M/s. Vinergy International Pvt. Ltd., Mumbai against orders-in-appeal No. YDB/155 to 209/M-II/2009, dated 19-11-2009 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II. 2. As the facts of all the above cases are similar, therefore, these are being taken up together for consideration : 2.0 Common brief facts of all the cases are that the applicants are merchant exporters, and engaged in supply of furnace oil to the foreign going vessels. Supply of provision or stores for use on board a ship going to a foreign port is considered as export by virtue of Explanation to Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and accordingly, rebate of duty paid thereon is admissible. They purchase duty paid furnace oil from M/s. Bharat Petroleum Corporation Ltd. (BPCL) and supplied the same to various foreign going vessels at Mumbai Port. The furnace oil manufactured by BPCL at their Mahul Refinery is cleared on payment of duty to their Sewree Terminal registered with Central Excise Department as a First Stage Dealer. They purchase duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or warehouse, except as otherwise permitted by C.B.E. C. by general or specific order. Commissioner (Appeals) has upheld the order-in-original on the ground that goods have not been exported directly from the factory or warehouse. 3.3 In this connection, in support of the contention that Commissioner (Appeals) finding is erroneous, legally as well as factually, the applicants make the following submissions : (i) Under Rule 2(h) of Central Excise Rules, 2002 warehouse means any place or premises registered under Rule 9 of Central Excise Rules. (ii) Under Rule 9 of Central Excise Rules, 2002, every person carrying on trade etc. has to apply for and obtain registration with the Central Excise Department. (iii) As per Notification 35/2001-C.E. (N.T.), dated 26-6-2001 [para (1)] every person specified under Rule 9(1) is required to apply for registration in the prescribed form and obtain registration, unless exempted from registration by C.B.E. C., under Rule 9 of Central Excise Rules. (iv) As per para 1(iv) of Notification No. 36/2001-C.E. (N.T.), dated 26-6-2001, the person who carried on wholesale trade or deals in excisable goods, except first stage deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 19/2004-C.E. (N.T.) instead self-sealing and self certification of removal of goods from warehouse is permissible, which has been done by the applicant. They also prepared ARE-1 alongwith Central Excise Invoices issued by BPCL showing ultimate destination, Invoice No. date, quantity, with corresponding refinery invoice No. date under which duty was initially paid with other details and registration no. of the tanker lorries carrying furnace oil. Shipping Bills prepared also establish linkage with ARE-1 and Central Excise invoices by mention of ARE-1 No. Date showing consignee as Master of the vessel. Further Bunker Delivery Note conclusively evidences receipt of the furnace oil by master/Chief Engineer of the ship. Hence, the findings of the lower authorities of non-linkage of the goods from the point of refinery till to the point of supply to ship as also non-supply directly from warehouse are factually as well as legally incorrect. 3.9 That the main ground based on which the refund claim has been rejected by the lower authorities is that the goods were not cleared from the factory or warehouse directly to the port of export, but cleared to BPCL-Sewree Terminal, wherefr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without payment of applicable rate of duty. Further, BPCL-Sewree Terminal is a storage point, which is also registered with CE Department, as a registered dealer. Since both, Mahul Refinery and Sewree Terminal, are registered with Central Excise Department, they are complying with all procedural formalities including issuance of Central Excise invoices, evidencing duty paid/payable on the goods covered in each of the invoices. As there cannot be any identification mark or otherwise on the furnace oil supplied by BPCL, all the oil marketing companies, including BPCL, is following FIFO (First-in-First-out) method. The only possible co-relation of the duty paid furnace oil and furnace oil exported is matching the quantity of the same and other collateral evidences like tanker lorry registration number etc. Further samples of furnace oil were also drawn at BPCL-Sewree Terminal and one sample each is retained by BPCL, the applicant Customs Officer and the Master of Vessel. From this also, the product is identifiable and corelatable. 3.12 In view of above submissions, the observations of the Commissioner (Appeals) that excisable goods shall be exported directly from a factory or wareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43, dated 28-10-2010 and made following submissions : 4.1 The Circular No. 294/10/97-CX., dated 30-1-2007, holds good in the present case as the identity of the goods cleared on payment of duty from the factory has to be co-related with the identity of the goods later exporter. Notification No. 41/94-C.E. (N.T.), dated 22-9-1994 had an identical condition of direct export from the factory for the grant of rebate and the general relaxation of the condition by the C.B.E. C. continues to apply for the purpose of Notification No. 19/2004-C.E. (N.T.). 4.2 Since the goods were cleared under self-sealing the supervisions was not conducted hence the co-relation was not established. The condition of direct export from the factory is waived subject to condition that the exporter desiring the export duty paid excisable goods (capable of being clearly identified) which are in original factory packed condition should make an application in writing to jurisdictional superintendent of Central Excise and the Central Excise Officer, on verification, is satisfied about the identity of goods, duty paid character and the duty payment is got verified from the originating Range where the duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... points during this oral submissions : Out of 55 claims, in case of 5 claims, goods were removed directly from the factory. The detail is given in the chart submitted during hearing. In other 50 cases, goods were removed from warehouse of BPCL-Sewree Terminal registered under Rule 9 of Central Excise Rules, 2002. The GOI Order Nos. 204-205/09-CX., dated 6-8-2002 in the case of M/s. BPCL is not applicable in their case as in that case goods of BPCL HPCL were stored in same tank. The storage tanks were also not registered under Rule 9. In the present case, the Sewree Terminal of BPCL registered with reference to stored goods of BPCL only. Assistant Commissioner Central Excise Mumbai-I vide order-in-original No. 2l/R/10 as Maritime Commissioner, allowed the similar rebate claim of the applicant party. BPCL Sewree Terminal warehouse has issued Central Excise Invoice under Rule 11(7) against which applicant has made payment for value and duty amount. Initially the duty is paid by manufacturer BPCL Refinery Mumbai. The Central Excise Invoice No. of Refinery is figuring in the ARE-I Destination - vessel name is given on both ARE-I Invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so where the goods were cleared directly from the factory. 5.1.3 The applicant reiterated that the Order Nos. 204-205/09 of the Government of India which has been relied upon by the Ld. Commissioner of Central Excise (Appeals) is not at all relevant for this case as In that case the material of BPCL and HPCL was stored in the same tank and it was not possible to identify the export goods. Moreover, it was not a warehouse of the manufacturer. In the Instant case the tank in Sewree Terminal is the exclusive tank of BPCL and in that particular tank only Furnace Oil cleared from the factory of BPCL was stored. Secondly, the export goods were examined by the customs officers at the port and the entire operation of supply of furnace oil to the FOREIGN GOING vessels at the port was carried out under the supervision of the jurisdictional Customs Officers who have also signed on Part-B of each ARE-1 which was not done in the said case. 5.1.4 The detailed Order No. 21/R/2010, dated 30-4-2010 passed by the Asstt. Commissioner, Mumbai-I sanctioning the Applicant s 3 identical claims has been accepted by the department and no appeal has been filed. Having accepted that order, the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bate claims in respect of furnace oil exported as stated above. The Assistant Commissioner of Central Excise rejected these rebate claims on the ground that the procedure prescribed under C.B.E. C. Circular No. 294/10-97-CX., dated 30-1-1997 was not followed In as much as the goods were not cleared from BPCL-Sewree Terminal under Central Excise Supervision, due to which the identity of exported goods can not be co-related with the identity of goods cleared from factory. Commissioner (Appeals) has upheld the impugned orders-in-original. Now the applicant has filed revision applications on the grounds stated in paras 4, 5 and 6 above. 8. Applicant has contended that clearance of furnace oil in respect of following ARE-1 was made direct from factory i.e. M/s. BPCL Mahul Refinery Mumbai. Sl. No. ARE-I No. 1. VIPL/019/07-08/14-1-2008 2. VIPL/020/07-08/25-1-2008 3. VIPL/021/07-08/1-2-2008 4. VIPL/005/08-09/23-7-2008 5. VIPL/008/08-09/26-5-2008 Department had objected to rebate claim in ARE-1s pertaining to clearance of furnace oil from M/s. BPCL-sewree Terminal. Since in all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l are registered under Rule 9 and therefore it is covered under the definition of warehouse. Further, as per para 3(a)(i) (procedures) of said notification, the manufacturer exporters registered under Central excise Rules, 2002 and merchant exporters who procure and export goods directly from factory or warehouse can exercise the option of exporting the goods sealed at the place of dispatch by Central Excise Officer or under self-sealing. In this case, exporter has opted for self sealing procedure. Department has not disputed the claim that goods were cleared from warehouse. In view of this position, first objection does not sustain. 9.2 Now, the Government takes up the ground of rejection as mentioned at 2 above for consideration of the case matter. Now, while keeping all the above submissions of the applicant in background, Government notes that the lower authorities has rejected the rebate claims on the core reason that the applicant did not submit/get endorsed the triplicate copy of the ARE-1s to/from the jurisdictional Range Superintendent of Central Excise so as to certify the duty paid nature and corelatable status of the export goods (furnace oil) as the goods were not cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for certain export incentives such as drawback, DEEC, DEPB or for determining exportability of the goods. 7.4 For Central Excise purposes the officers of Customs at the place of export shall examine the 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. In the instant case, the goods have been examined by the Customs at the Place of export of port as per provision of paras 7.3 and 7.4 of the Chapter 8 as enumerated above. The Customs Officer has duly endorsed the original and duplicate copy of the ARE-1s, after satisfying himself about the fact that the goods intended for export are the same which were cleared on the relevant ARE-1s. The relevant Shipping Bill No. against which goods were exported was also mentioned in the Customs endorsement on each ARE-I Part-B. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on export goods set aside - Section 11A of Central Excise Act, 1944 - Rule 18 of Central Excise Rules, 2002. [paras 2.4, 5.1, 5.2, 5.3, 6, 7, 8, 9] In the referred judgment, goods were treated to have been exported, despite mismatch in the description of goods as given in ARE-I/Invoice and Shipping Bill relying on the certification by Customs Officer in Part-B of ARE-I that consignment (mentioned in ARE-I) was shipped under their supervision under Shipping Bill No............(Shipping Bill No. was mentioned in ARE-I by Customs). 9.8 Applicant has contended that their 3 identical claim had been sanctioned by Asstt. Commissioner Central Excise Mumbai-I vide order-in-original No. 21/R/10, dated 30-4-2010. The order was accepted by department. In the said order Asstt. Commissioner Central Excise has accepted the duty paid nature of goods exported which got co-related with the goods cleared from factory/warehouse Terminal through the collateral evidences. The sanction of these rebate claims in fact also strengthen their case. 9.9 Regarding certification of duty payment on the goods, Government notes the furnace oil cleared on payment of duty on Central Excise Invoices by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o rather than denying to them the benefit on the technical grounds that the time when they could have done so, had elapsed. While drawing a distinction between a procedural condition of a technical nature and a substantive condition in interpreting statute similar view was also propounded by the Apex Court in Mangalore Chemicals and Fertilizers Ltd. v. Dy. Commissioner - 1991 (55) E.L.T. 437 (S.C.). In fact, as regards rebate specifically, it is now a title law that the procedural infraction of Notification, circular, etc. are to be condoned if exports have really taken place, and the law is settled now that substantive benefit cannot be denied for procedural lapses. Procedure has been prescribed to facilitate verification of substantive requirement. The core aspect or fundamental requirement for rebate is its manufacture and subsequent export. As long as this requirement is met other procedural deviations can be condoned. This view of condoning procedural infractions in favour of actual export having been established has been taken by Tribunal/Govt. of India in a catena of orders, including Birla VXL Ltd., 1998 (99) E.L.T. 387 (Tri), Alfa Garments - 1996 (86) E.L.T. 600 (Tri.), T. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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