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M/s. Madhav Steel Versus Union Of India

2010 (8) TMI 934 - Bombay High Court

Rebate claim - only dispute raised, is that the Petitioners have failed to establish that the goods sold by the Petitioners to the Exporter under 7 invoices, form part of the goods purchased by the Petitioners from the manufacturer under the 11 invoices raised by the said manufacturer - Held that: - documents produced by the Petitioners, establishes beyond any doubt that the goods purchased by the Petitioners from the manufacturer are the goods sold by the Petitioners to the exporter and the sam .....

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- Dated:- 10-8-2010 - V.C. DAGA & S.J. KATHAWALLA, JJ. For The Appellant : Mr. Anil Balani For The Respondent : Mr. P.S. Jetly JUDGMENT : By this Petition, the Petitioners have prayed for setting aside the Order dated 29th May 2006 passed by the Respondent No.2 in Revision under Section 35EE of the Central Excise Act, 1944. The said Revision was preferred against the Order allowing the Appeal filed by the Deputy Commissioner of Central Excise and Customs (Respondent No.3) and consequently, r .....

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anufacturer). The Petitioners thereafter under 7 invoices (Exhibits- C-1 to C-7 of the Petition) sold 151.500 MTs of the said goods to M/s. H.M. Traders, Mumbai (the exporter). The exporter exported the said 151.500 MTs of the said goods under 3 ARE-1s issued by the Petitioners (Exhibits- D-1 to D-3 of the Petition). The Petitioners also obtained the No Objection Certificate from the exporter for the purpose of claiming the rebate of central excise duty directly from the Central Excise Authoriti .....

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ral Excise Rules, 2002 on export of 151.500 MTs of Stainless Steel Sheets in Coils (Hot Rolled). 5. The Respondent No.3 vide his Order dated 20th August 2004 rejected the Petitioners rebate claims on the ground that the procedure required under the Board's Circular, has not been followed by the exporter and the goods originally procured by the Petitioners from M/s. Shah Alloys Limited, have not been exported. 6. Being aggrieved by the Order of the Respondent No.3, the Petitioners filed an Ap .....

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The duty on the exported goods have been paid; and iii. Sale proceeds of the exported goods from the overseas buyer have been duly received through banking channel. The lapse mentioned in the impugned order was condonable. The directives by the Government of India while deciding various appeals under Section 35EE of the Central Excise Act, 1944 and also by the Board in this context directing that, the rebate claim should not be rejected merely on the procedural and/or technical ground have to b .....

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s held that the description and the quantity of the goods cleared from the manufacturing place is different from the description and the quantity of the goods given in the dealer's invoice. There is no identification mark/numbers on the goods which can prove that the Respondents have exported the same goods which were cleared from the manufacturer's place on payment of central excise duty. It was also held that the Respondents have not exported goods after payment of central excise duty .....

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its earlier view in Kedarnath Jute Manufacturing Company vs. Commercial Tax Officer (1965) 3 SCR 626, to the effect that a liberal construction of the requirement to furnish a declaration form by a dealer under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, is likely to facilitate the commission of fraud and introduce administrative inconveniences. Therefore, the same cannot be condoned. The Respondent No.2, therefore, allowed the Revision Application. Consequently, the claim .....

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address of the manufacturer as well as the invoice number and date. It also reveals the description, classification and quantity of the goods. 10. It is submitted that reliance on CBEC Circulars by the Respondent No.2 is not well-founded since the goods are clearly identifiable and their duty paid character was verified in the following manner :- (a)The goods manufactured and the goods exported are Stainless Steel Hot Rolled Coils; (b) The quantity exported is covered by the larger quantity whic .....

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12. It is submitted that the finding given by the Respondent No.2 in paragraph 8.5 of the impugned Order that the Respondents have not produced documents such as LR, etc. is incorrect. The same is also belied in view of the findings of the Original Authority in paragraph 5(b) of the Order that the Petitioners vide their letter dated 8th July 2004 enclosed transporters documents showing the evidence of transfer of the goods. 13. It is submitted that the proforma of the ARE 1 does not provide for .....

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re and subsequent export of the goods. As long as this requirement is met, other procedural deviations can be condoned. The procedure has been prescribed to facilitate verification of substantive requirements. As per the law laid down by the Hon'ble Supreme Court, substantive benefit cannot be denied for procedural lapses. Procedural infractions are to be condoned if exports have actually taken place. 15. It is submitted that the impugned order of the Respondent No.2 in the instant case, is .....

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pse of a long time. Further, admittedly declaration in Form-14 was not filed. In the circumstances, there was no scope for verification. Further, the Hon'ble Supreme Court held that the burden of octroi would have been passed on to the consumers. Therefore, the Hon'ble Apex Court refused to exercise its discretion and dismissed the SLP. On the other hand, in the case of Mangalore Chemicals and Fertilizers Ltd. vs. Deputy Commissioner, reported in 1991 (55) ELT 437, the Hon'ble Suprem .....

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8. It is submitted on behalf of the Respondents that though the manufacturer's invoices show complete details of the products sold to the Petitioners, viz. 'S.S. Sheets in coil form (200) SC-I Grade Hot Rolled produce of various thickness ranging from 2.6 mm to 2.9 mm', in the export documents, such as, ARE 1s, Invoices, Shipping Bills, under which the Petitioners sold and exported the products, the thickness and the complete description of goods exported are not shown, but show only .....

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hat the Petitioners have mis-declared themselves as manufacturer on the body of the subject ARE 1. The Petitioners had also not followed the procedure prescribed under CBEC Circular No. 18/92-CX-6, dated 18th December 1992 read with Circular No. 294/10/1997-CX, dated 30th January 1997. It is submitted that the decision of the Hon'ble Supreme Court in Indian Aluminium Company Limited (supra), is squarely applicable to the present case. It is, therefore, submitted that rule be discharged and t .....

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, after procuring the said export goods from the manufacturer under 11 invoices, the Petitioners sold 151.500 MTs of Stainless Steel Sheets in Coils (Hot Rolled) under 7 invoices of the Petitioners to M/s. H.M. Traders (the exporter). It is an admitted fact that the goods which have been duly exported by the exporter are the goods sold by the Petitioners to the exporter under 7 invoices of the Petitioners. The said goods are exported after physical examination by the Central Excise and Customs A .....

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goods purchased by the Petitioners from the manufacturer under the 11 invoices raised by the said manufacturer. The Respondent No.2 vide its impugned Order has reached the conclusion that the Petitioners have failed to establish from the documents that the goods purchased by the Petitioners from the manufacturer, are the goods which have been exported by the exporter. In view thereof, we have compared the invoices raised by the manufacturer at the time of sale of the said goods to the Petitioner .....

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ces raised by the Petitioners shows that the space provided for description of the goods is not as large as the space provided for description of the goods in the invoice raised by the manufacturer. In view thereof, the Petitioners have in their invoice described the goods by using abbreviations "SS/HR Coils". However, the name of the manufacturer M/s. Shah Alloys Limited along with the invoice number under which M/s. Shah Alloys Limited sold the goods to the Petitioners and the descri .....

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r of goods in the AREs, though the name of the Petitioner No.1 is shown, in column no. 5 the Petitioner No.1 is shown as the dealer. The Central Excise Officer has also certified that the goods set out in Form-ARE 1 have been exported. 23. We, therefore, hold that the aforestated particulars set out in the documents produced by the Petitioners, establishes beyond any doubt that the goods purchased by the Petitioners from the manufacturer are the goods sold by the Petitioners to the exporter and .....

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